Advisors explore alternative income strategies as interest rates rise

The short version

• Financial advisors are evaluating alternative yield sources, such as catastrophe bonds and asset-backed lending, to generate income outside traditional fixed income.[CNBC]
• Matt Gentzkow of Coastal Bridge Advisors observed that seeking alternative sources of yield often requires investors to assume additional portfolio risk.[CNBC]
• Yield options highlighted by advisors include collateralized asset-backed loans offering 6% to 10% returns and catastrophe bonds delivering mid-to-high single digits.[CNBC]

Key facts

• Tyler Glover of William Blair stated that various alternative strategies can produce current income outside traditional bonds.[CNBC]
• Matt Gentzkow of Coastal Bridge Advisors noted that pursuing alternative yield sources often requires taking on greater portfolio risk.[CNBC]
• Paul Karger of TwinFocus Capital Partners favors catastrophe bonds, which typically generate mid-to-high single-digit returns.[CNBC]
• Stuart Katz of Robertson Stephens stated that collateralized asset-backed lending opportunities are yielding between 6% and 10% on a tax-deferred basis.[CNBC]
• Michael W. Crook of Janney Montgomery Scott noted that master limited partnerships are less compelling in a rising interest rate environment.[CNBC]

Sources

Outlet counts describe coverage, not independent confirmation. Reports may share a wire service or original source.

• Where investors are finding income outside traditional bonds as rates riseCNBC