Potential Unforeseen Risks in the Bond Market – SS&C | ALPS Advisors and Smith Capital Investors – 7.18.19
Summary:
Now On Demand.
The historic rally in bonds during 2019 has radically changed the risk return landscape for fixed income products. Very tight credit spreads are affecting corporate bonds and falling interest rates are impacting mortgage and structured securities. The generally high correlations of many bond funds to the equity market creates an environment where it can be hard to figure out where to turn when it comes to bond investing.
Please join us as we discuss strategies to potentially help mitigate corporate spread risk, highlight sector allocations that could reduce the negative traits of mortgage-backed securities (MBS), and focus on bond management that can create negative correlations to equities.
It is easy to lose sight of what could go right…
Agenda:
The current risks to be considered in Fixed Income
Tight Credit Spreads
Low Rates
Mortgage securities with refinancing risk (Negative convexity)
These risks have created opportunity for bond investors
Security selection in credit: Balance sheet management rules
Managing where you own your rate risk
MBS/Securitized: options to minimize negative effects
Fund updates on the ALPS | Smith Total Return Bond Fund (Ticker: SMTHX) and the ALPS | Smith Short Duration Bond Fund (Ticker: SMDSX)
Q&A
Sponsors of this webcast may contact registrants.
Speakers:
Gibson Smith* Founder Smith Capital Investors
Founder of Smith Capital Investors. Mr. Smith founded the firm in a desire to bring outstanding people together to build a business that focuses on people and investing. He founded the firm on the belief that we are investors first and foremost and seek to be the best. Underlying the pursuit is hard work, dedication, and persistence. The firm centers around three key drivers – investing, people, and culture. Everything we do, say, and pursue will have to pass the test of these key drivers.
Gibson has 28 years of investment experience. He previously served as Chief Investment Officer, Fixed Income, of Janus Capital Management LLC, a position he had held from January 2006 through March 2016. In that position, Gibson was also a member of the Janus Executive Committee and Portfolio Manager of Janus Fixed Income strategies.
As Chief Investment Officer, Gibson was responsible for Janus’ investment process within the firm’s fixed income division and served as Portfolio Manager on most of Janus’ fixed income strategies and funds.
Gibson joined Janus in 2001 after spending the first 10 years of his career at Morgan Stanley in Manhattan and San Francisco.
He is actively engaged with the University of Colorado at Boulder (graduated in 1991 with a degree in Economics). He chairs the Burridge Center at the Leeds School of Business at the University of Colorado, Boulder, sits on the Leeds School of Business Alumni and Friends Board, the University of Colorado Foundation Trustee Board, and the Investment Advisory Committee for the University of Colorado Treasury. He serves as the President of the Board at Country Club of the Rockies and previously served on the Board of Colorado Golf Club.
Gibson has a passion for investment management, leadership, security analysis, economics, the financial markets, and golf.
Colleen Denzler*, CFA (Investor) Smith Capital Investors
Colleen Denzler is an Investor at Smith Capital Investors, a position she has held since March 2019. Prior to joining the team, she served as Founder and Lead Consultant at Colleen Denzler Strategy Partners. As an entrepreneur, Ms. Denzler dedicated herself to helping the best and most ethical asset managers define and communicate their investment process to potential and existing clients.
Colleen also served as Chief Investment Officer (designee), First Affirmative Financial Network, a $1 billion RIA, as well as President of the SRI Conference. Prior to that Colleen was with Janus Capital Management LLC as the Global Head of Fixed Income Strategy. In this role, she created and led the business strategy of Janus Fixed Income, in conjunction with the Chief Investment Officer. She delivered market insight, investment process and performance to clients all over the world. During her tenure at Janus, Colleen wrote a suite of client focused thought leadership. Colleen has spent over 15 years as a Fixed Income Portfolio Manager and led a team of Portfolio Managers, overseeing $6 billion in assets. Additionally, she has experience managing assets utilizing ESG methodology.
Colleen earned a Bachelor of Science degree in Finance from Radford University. She earned the Chartered Financial Analyst (CFA) designation and is a member of the CFA Society of Colorado. Colleen volunteers her time to the University of Colorado, Boulder, Leeds School of Business to help current and prospective female students learn more about career opportunities in finance. She also gives her time to Community Food Share, which helps people in need of food in Boulder and Broomfield County.
Overview:
Title: Potential Unforeseen Risks in the Bond Market
* Registered Representative of ALPS Distributors, Inc.
Institutional Use Only.
An investor should consider investment objectives, risks, charges and expenses carefully before investing. To obtain a prospectus, which contains this and other information, call 1.866.759.5679 or visit www.alpsfunds.com.
Please read the prospectus carefully before investing.
An investment in the Funds involves risk, including loss of principle.
Please note that the Funds are new and have limited operating history.
Fixed Income Securities Risk. A rise in interest rates typically causes bond prices to fall. The longer the duration of the bonds held by a fund, the more sensitive it will likely be to interest rate fluctuations. Duration measures the weighted average term to maturity of a bond’s expected cash flows. Duration also represents the approximate percentage change that the price of a bond would experience for a 1% change in yield. For example: the price of a bond with a duration of 5 years would change approximately 5% for a 1% change in yield. The price of a bond with a duration of 10 years would be expected to decline by approximately 10% if its yield was to rise by +1%. Bond yields tend to fluctuate in response to changes in market levels of interest rates. Generally, if interest rates rise, a bond’s yield will also rise in response; the duration of the bond will determine how much the price of the bond will change in response to the change in yield. The Fund’s investments in fixed-income securities and positions in fixed- income derivatives may decline in value because of changes in interest rates. As nominal interest rates rise, the value of fixed-income securities and any long positions in fixed income derivatives held by the Fund are likely to decrease, whereas the value of its short positions in fixed-income derivatives is likely to increase.
Market Risk. Overall securities market risks may affect the value of individual instruments in which the Fund invests. Factors such as domestic and foreign economic growth and market conditions, interest rate levels, and political events affect the securities and derivatives markets. When the value of the Fund’s investments goes down, your investment in the Fund decreases in value and you could lose money.
ALPS Distributors, Inc. and ALPS Portfolio Solutions Distributor, Inc. are affiliated.
ALPS Portfolio Solutions Distributor, Inc. is the distributor for the Funds.
SMT000225 7/31/2019
