BONDS ARE BACK

Yesterday I talked about "what" bond funds to buy now according to the latest and greatest from U.S. News Invested. Today I submit some advice about the "why" in this changing environment according to the latest and greatest from the PBS program "WealthTrack."  

BONDS ARE BACK

October 26, 2023

Dear WEALTHTRACK Subscriber,

Remember the acronym TINA, there is no alternative to stocks? That theme reigned supreme when interest rates were near zero and the stock market was the only game in town for income and was outperforming every other traditional asset class.  

That stock advantage is now being questioned by fans of bonds whose theme is PATTY, or pay attention to yields, as the Federal Reserve raises interest rates at the fastest clip in four decades, a full five and a quarter percentage points since March of 2022.  

That rapid rise in rates was a nightmare for fixed income investors. Bond prices fall as interest rates rise, and bonds suffered their worst declines in history in 2022. But poor performance is frequently followed by positive results in the investment world and so it typically is with bonds. 

That is one of the many reasons this week’s guest says bonds are back. She is Mary Ellen Stanek, Co-Chief Investment Officer of Baird Advisors and President of the Baird Funds where she heads up the fixed income team. Stanek was honored with the Morningstar Award for Investing Excellence in 2022, as Outstanding Portfolio Manager for her “disciplined and risk-aware approach, thoughtfully navigating various market environments... and impressive absolute and risk-adjusted returns” in her 20-plus years at Baird. 

Stanek is Portfolio Manager of several gold medalist funds including the Baird Aggregate Bond Fund and the Baird Core Plus Bond Fund. Both funds have beaten their benchmarks since their inception in 2000 and in multiple years in between. 

She has been named one of Barron’s 100 Most Influential Women in U.S. Finance for several years, and Fortune has named Baird one of the “100 Best Companies to Work For” for 20 consecutive years.  

In this week’s interview, Stanek explains why she is convinced that bonds are back, especially considering the Federal Reserve’s determination to keep conditions tight to fight inflation. 

In our online EXTRA feature, Mary Ellen Stanek shares the strategies that got her clients and staff through 2022, the worst bond bear market in history.  

If you miss the show on public television, you can watch it on our website over the weekend, along with our past programs and our guests’ One Investment recommendations.  You can also find the WEALTHTRACK podcast on SoundCloud as well as iTunes and Spotify.

Have a super weekend and make the week ahead a healthy, profitable and productive one!

Best regards,

Consuelo