Managers & Models

Fixed Income Models

Significant advisor and investor interest right now is on how to secure competitive interest rates on liquid cash, and to ensure the attractive rates currently available are retained over the investment time horizon for the assets currently in cash and fixed income but where the assets do not need to be fully liquid. In this article we profile EQIS and PIMCO models that are attracting significant assets right now.

The Freedom Advisors platform includes a wide variety of fixed income models across the quality and duration spectrums, some of which are shown in the table below.

EQIS Short Term Fixed Income Models

For investors with cash needed to be relatively liquid but looking for a bit more duration than just a liquid money market fund, your EQIS investment team has constructed a model that is part money market fund and a basket of ETFs of short-term Treasuries and what they believe are high-quality corporates. An institutional version of this model is also available at a $2 million minimum to take advantage of the higher yielding institutional money market fund.

PIMCO Taxable Fixed Income ETFs

PIMCO is one of the leading names in fixed income and has been helping investors achieve their goals for more than 50 years. Its model portfolios leverage time-tested investment process and active management expertise to help advisors efficiently deliver innovative investment solutions.

PIMCO’s core investment philosophy includes:

• A focus on helping actively get – and stay – ahead of the markets
• Actively managed underlying funds to help maximize opportunities
• Sophisticated risk management platform to support investment decisions

PIMCO believes that as the foundation of a client’s portfolio, fixed income provides several key benefits including the potential for income, total return, capital preservation, and equity diversification. With these benefits under pressure from increased volatility across interest rate and credit risks, PIMCO’s fixed income models follow its forward-looking investment process to balance the trade-offs inherent in today’s market. The underlying funds seek to capitalize on the structural advantages of active fixed income management.

The models take an outcome-oriented approach, allowing advisors to select a model that best reflects client fixed income objectives.

Freedom Advisors platform offerings include:

• PIMCO Taxable Fixed Income ETF: Enhanced Core Model
• PIMCO Taxable Fixed Income ETF: Capital Preservation Model

“In this market where the Federal Reserve is expected to be close to finished raising rates, fixed income has been under weight in many portfolios,” said EQIS Chief Investment Officer Jonathan Shiffer. “Enhanced Core is PIMCO’s best idea for a core fixed income ETF model where capital preservation is risk averse. However, if you don't trust this market and think a recession is coming then Capital Preservation might be the right fit.”

Here is how they compare: