Lido News

30 April 2024

Jeff Garden in Citywire: ‘My Favorite Flavor: Savoring strategies'

Lido Advisors CIO JeffGarden was recently featured in Citywire  ‘My Favorite Flavor: Savoring strategies,’ exploring the different multi-sector fixed income funds selected asset allocators gravitate toward.

"Lido Advisors uses multi-sector fixed income funds for all clients, holding them alongside core bonds funds in a core/satellite approach.

‘This model allows us to implement our views in the asset class by investing in both single and multi-sector fixed income managers, and reduces fund concentration risk,’ says Jeff Garden, CIO of the national wealth advisory firm.

For high quality core exposure, it uses the Oakhurst Core Fixed Income fund, which is managed by a Lido affiliate firm. It supplements this with multi-sector funds from a handful of fund managers, with a particular favorite being PIMCO GIS Income.

‘It’s a shorter-duration fund with extensive credit exposure and a strong track record, which helps our clients to be more opportunistic in the asset class,’ says Garden.

Overall, the team prefers being duration neutral to provide clients with attractive coupons while also protecting them if the outlook for interest rates unexpectedly changes.

Although investment grade and high yield spreads are extremely tight, yields are attractive and credit fundamentals remain sound. A large portion of high yield bonds don’t mature until 2026, meaning interest expense should remain manageable for most companies in the near term. However, the base case for Lido is a high-for-longer interest rate environment, which should eventually cause the economy and high yield fundamentals to weaken.

‘We therefore prefer higher quality issuers, such as investment grade companies and agency MBS [mortgage-backed securities], as they provide attractive yields with lower credit risk,’ adds Garden."

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