ATLANTA, July 9, 2013 /PRNewswire/ -- RidgeWorth's publication, "Fixed Income Strategies for Rising Rate Environments," suggests that various fixed income strategies may be employed as potential counters to interest rate changes. For fixed income investors, rising rate environments are often associated with falling bond prices. But for prepared advisors and clients, certain strategies may provide a more competitive total return.
According to the paper, there are several factors that have led to the current low interest rate environment. "We expect short rates to be low for quite some time. While short-term rates and the Fed's tapering of quantitative easing are not independent of each other, this tapering does not necessarily indicate that the Fed is imminently going to go raise short term rates," said Chad Stephens, managing director at StableRiver Capital Management and portfolio manager of the RidgeWorth U.S. Government Securities Ultra-Short Bond Fund.
The paper suggests using ultra-short bonds and floating rate bank loans to prepare for changing rate environments. Because of ultra-short bonds' lower sensitivity to rate changes, these bonds may offer greater price protection than their longer-term equivalents. Floating rate bank loans feature coupons that reset as interest rates change, generally allowing them to hold their value in a changing rate environment.
The paper concludes that investors may want to consider shifting the fixed income portion of their portfolios into professionally managed strategies designed to combat, or even benefit from, rising interest rates. RidgeWorth Investments offers multiple fixed income mutual funds designed to generate attractive return potential during any interest rate environment.
To access this white paper, visit www.ridgeworth.com/rising-rates. To access additional research tools, visit https://www.ridgeworth.com/news-insights/ridgeworth-research.
About RidgeWorth Investments
RidgeWorth Investments serves as a holding company that owns interests in six investment boutiques with approximately $50 billion of assets under management as of March 31, 2013. RidgeWorth's investment boutiques manage a wide variety of investment disciplines across the fixed income, equity, and liquidity management asset classes. Our boutiques provide investment management services to a growing client base that includes endowments, foundations, corporations, healthcare organizations, municipalities, public funds, associations, insurance companies, labor unions and high net worth individuals. In addition, RidgeWorth serves as the investment adviser to the RidgeWorth Funds mutual fund family. RidgeWorth Investments is a trade name for RidgeWorth Capital Management, Inc., an investment adviser registered with the SEC headquartered in Atlanta. For more information about RidgeWorth, visit www.ridgeworth.com.
An investor should consider the funds' investment objectives, risks, and charges and expenses carefully before investing or sending money. This and other important information about the RidgeWorth Funds can be found in the fund's prospectus. To obtain a prospectus, please call 888-784-3863 or visit www.ridgeworth.com. Please read the prospectus carefully before investing.
Bonds offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return. Generally, a Fund's fixed income securities will decrease in value if interest rates rise and vice versa. U.S. Government guarantees apply only to the underlying securities of the Fund's portfolio and not the Fund's shares. Floating rate loans are typically senior and secured, in contrast to other below investment grade securities. However, there is no guarantee that the value of the collateral will not decline, causing a loan to be substantially unsecured. Loans generally are subject to restrictions on resale. Certain types of loans may limit the ability of the Fund to enforce its rights and may involve assuming additional credit risks.
© 2013 RidgeWorth Investments. RidgeWorth Investments is the trade name for RidgeWorth Capital Management, Inc., an investment advisor registered with the SEC and the adviser to the RidgeWorth Funds. RidgeWorth Funds are distributed by RidgeWorth Distributors LLC, which is not affiliated with the adviser. Collective Strength Individual Insight is a federally registered service mark of RidgeWorth Investments.
NOT FDIC INSURED
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MAY LOSE VALUE
SOURCE RidgeWorth Investments