A portfolio manager at J.P. Morgan Asset Management and the co-founder of BondBloxx recently expressed positive outlooks on the fixed-income market, citing current yields and diversification benefits for investors. The statements were made by Priya Misra of J.P. Morgan and Joanna Gallegos of BondBloxx during a broadcast on CNBC’s “ETF Edge.”
Misra, a portfolio manager at J.P. Morgan Asset Management, described the current environment for high-quality fixed income as a “once in a generation opportunity” for investors.
“You can actually take credit risk in the highest quality companies and still get [a] 6.5% [yield],” Misra stated. “So, you actually don’t have to go down in credit [quality].”
She suggested that fixed-income investments offer a way to diversify portfolios that may have significant exposure to technology and artificial intelligence stocks. “What fixed income gives you is this diversified set of returns. It’s not just an AI trade or a tech trade,” Misra said.
Misra co-manages the JPMorgan Core Plus Bond Fund ETF (JCPB). According to the firm’s website, as of Aug. 31, the fund held nearly $16 billion in assets, with over 75% of its holdings in debt rated BBB or higher. Misra noted a recent strategy adjustment for the fund.
“We’ve actually been increasing some of the double-B [and] single-B exposure because there has been a widening in high yield spread,” she said. “And now, we’ve started in the last few days to increase some duration as well.”
Joanna Gallegos, co-founder of the investment firm BondBloxx, also advised investors to look at debt markets, describing yields as “historically attractive.”
“You want to really consider getting some corporate debt into your portfolio,” Gallegos said during the same interview. “It’s really in the investor’s best interest to start looking at the income that’s back in fixed income. It can offset the volatility in your portfolio.”
Gallegos cited high and stable base rates, along with corporate fundamentals, as part of her reasoning. “The fundamentals of these corporations are so strong, and the economy continues to grow,” she added. “We really think that’s being lost in the narrative around Treasury rates.”
BondBloxx specializes in fixed-income exchange-traded funds. According to data from FactSet, the JPMorgan Core Plus Bond Fund ETF was down over 5% year-to-date as of the close of markets Friday, while the BondBloxx Private Credit CLO ETF (PCMM) was down 0.6% over the same period.
