On today’s episode of The Financial Commute, host Chris Galeski welcomes Portfolio Management Analyst Hunter Daniel to discuss fixed-income securities. Hunter starts by talking about his path to Morton and how his prior experience helped him discover his interest in portfolio management. Hunter joined Morton Wealth in 2022 and plays a critical role on Morton’s research and investment teams. 

Hunter talks about the fixed-income selection process at Morton and how the importance of cash yield plays a part in the ultimate decision to pursue a particular fixed-income strategy. While this may be obvious to some, Hunter goes into detail about the level of diligence that goes into the selection process, particularly as it relates to money markets and Treasury Bills and how duration and illiquidity risks factor into those considerations.  

Hunter also discusses how the yield curve generally slopes upwards, meaning rates on long-term bonds are higher than short-term bonds; however, in recent months, the yield curve has become inverted. Therefore, Hunter says it may appeal to clients to invest in short-term U.S. Treasury Bonds or money market securities. He also expects the Federal Reserve to continue to raise interest rates, which could make short-term bonds even more appealing depending on an investor’s individual goals and risk tolerance. He says he has been investigating more liquid ETFs with high volume and low spread (meaning smaller differences between the buy price and sell price, translating to lower trading costs for the investor). He’s also been examining fixed-income securities issued by emerging markets because if the dollar depreciates in the future, then these securities denominated in foreign currencies might become more valuable in terms of dollars. 

Disclosures: 

Information presented is for educational purposes only and is not intended as an offer or solicitation with respect to the purchase of any security or asset class. This presentation should not be relied on for investment recommendations. Any investment strategy including the private investment opportunities discussed herein are speculative and involve a high degree of risk.  References to specific investments are for illustrative purposes only and should not be interpreted as recommendations to purchase or sell such securities.

Targets or other forecasts contained herein are based upon subjective estimates and assumptions about circumstances and events that may not yet have taken place and may never take place. If any of the assumptions used do not prove to be true, results may vary substantially from the target return. Targets are objectives, are shown for information purposes and should not be construed as providing any assurance as to the results that may be realized in the future from investments.  Many factors affect performance including changes in market conditions and interest rates and changes in response to other economic, political, or financial developments. There is no guarantee that the investment objective will be achieved, and Morton makes no representations as to the actual composition or performance of any security. Each investment opportunity is unique, and it is not known whether the same or similar type of opportunity will be available in the future. It should not be assumed that Morton will make investment recommendations in the future that are consistent with the views expressed herein. Morton makes no representations as to the actual composition or performance of any security. Past results are no guarantee of future results. All investments involve risk including the loss of principal.

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