People keep hearing all over the media that bonds are bad. During the recent jump in interest rates, many investors have experienced some pain in their fixed income holdings. However, as an investment firm we do still feel that fixed income has a place in most investors portfolio, and that there are still some opportunities for return in the fixed income arena. Angel Oak Multi Strategy Income Fund was recently featured in a Barron's article. While the fund referenced is not the institutional class that we have added for some clients, the strategy and our reasoning for liking the fund is the same. Here are a few reasons why we like this investment in the current fixed income environment.
- Low interest rate sensitivity (duration currently 2.9)
- Attractive yield betweeen 4-5%
- Continued improvement in the housing sector
- Fund is well positioned for a rising interst rate environment
- Adds diversification as this investment has low correlation other bond holdings