Jay Schilling, CFA, Vice President and National Sales Manager, Institutional Platform for Resolute Investment Managers, joined Keith Black, Managing Director of RIA Channel, to discuss Resolute’s partnership with more than thirty independent investment managers.
Resolute Investment Managers is a multi-affiliate asset management platform including American Beacon Advisors, National Investment Services, RSW Investments, Shapiro Capital Management, and SSI Investment Management.
Resolute is having interesting conversations with advisors now that risk-free rates have increased to 4% to 5%. While T-bills and money market rates may seem attractive, there is reinvestment risk if rates fall this year. Schilling suggests that lengthening duration to three years is attractive given today’s higher rates. Municipal bond strategies with a tax-equivalent yield of 7% may be especially attractive.
After the 2023 rally, the US equity risk premium is about 1%. Investors are now questioning whether credit strategy returns can compete with historical returns to equities. Schilling notes that high-yield bonds outperform equities over the next twelve months in 87% of instances when high-yield credit spreads are 3% wider than the equity risk premium.
Resolute has a relationship with hedge fund managers that offer liquid alternative investment products in ’40 Act fund structures. These include Man AHL’s systematic trend-following strategy and SSI Investment Management’s convertible bond arbitrage funds.
Resolute is also a distributor of ARK Invest funds that focus on disruptive innovation. Each year, ARK Invest publishes a list of Big Ideas that will change our lives over the next five years. ARK Invest is one of the early pioneers of the active ETF structure and continues to invest in highly concentrated portfolios with significant active risk to market indices.
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