MacKay Shields LLC

👉 Explore the opportunities with specialty fixed income perspectives from Michael DePalma, Zachary Aronson, Neil Moriarty, and Sanjit Gill, CFA. Download the full report → https://lnkd.in/es9hQi4R #FixedIncome #Bonds #InvestmentStrategy #PortfolioManagement

In our latest episode of Forward Guidance, Steven Friedman and Michael DePalma discuss whether China’s recent policy announcements represent a watershed moment, akin to former ECB President Mario Draghi’s “Whatever it Takes” speech that signaled a shift to decisive policy action during the European sovereign debt crisis. And fittingly, given that this was recorded on the afternoon of the firm September CPI print, they also discuss the continued strong performance of the US economy and what it means for markets and portfolio positioning. The rapid shift in market narrative away from recession risks towards reflation has been nothing short of remarkable.

The securitized market accounts for over 20% of the entire US bond market, making it as substantial as the corporate credit market itself. As an active manager, we focus on under-appreciated sectors. Today, we're zeroing in on structured credit, a $4 trillion opportunity set that may be ripe for alpha generation (source: Bloomberg). Zachary Aronson explores the segments of non-agency commercial mortgages and asset-backed securities, where amidst market challenges and price dislocation, potential pockets of value that offer above-market yields at below-market prices can be found. Click here to view more: https://lnkd.in/eGfdGx9Q

As total-return investors, we're excited about the opportunity to buy bonds at a discount. In a landscape of attractive yields but tight spreads, this phenomenon offers potential for both return and resilience in multi-asset portfolios. Did you know you can now buy a 5% income stream for $89 given the average yield on the US Aggregate Index, compared to over $101 in 2008 (source: Bloomberg)? In our view, this marks an attractive entry point as bonds are typically redeemed at par value, the "pull-to-par" effect results in price appreciation as the bond matures. Click here to view more → https://lnkd.in/e39aD6tc

Last month, MacKay Shields teamed up with colleagues across New York Life to support Good Shepherd Services. Together, we donated backpacks full of school supplies to the Truman Beacon Community Center, empowering NYC kids from Pre-K to High School. We are proud to invest in our city's future, one backpack at a time! New York Life Investments | Apogem Capital | #GoodShepherdServices

The US banking industry is experiencing significant shifts that are opening up new fixed income markets. One such market is Synthetic Risk Transfers (SRTs), which we believe could offer unique opportunities for fixed income investors. Read on to learn why we believe SRTs merit consideration as part of a fixed income portfolio, particularly those seeking higher yields and diversification. https://bit.ly/47TXh2U

I have seen a number of headlines about consumers pulling back on discretionary spending, and while I am sure this is the case for many households, in the aggregate it is very hard to see any meaningful signs of slowing, including in the August personal income and outlays report. My base case is for a continuation of solid discretionary spending: the labor market will likely continue to slow a bit but overall remains in good shape with decent real wage growth. And with the shift to monetary policy easing, financial conditions have eased considerably, which will be supportive of further household wealth accumulation – another important driver of spending. Throw in the upward revisions to household savings and gradually easing consumer credit conditions, and the overall picture remains one of household spending staying on a very solid footing for the foreseeable future.

Our upcoming video series looks at how using multiple diversified sources of return may create flexibility to respond to changing opportunities → https://lnkd.in/ekXrSWfz 1. Michael DePalma highlights the overlooked benefits of discounted bonds, which in our view offer greater risk mitigation during market downturns and potential enhanced gains during rallies. 2. Zachary Aronson explores yields in non-agency commercial mortgages and asset-backed securities, despite current challenges. 3. Neil Moriarty discusses opportunities in what we believe are undervalued areas such as commercial real estate as market spreads tighten. 4. Sanjit Gill, CFA emphasizes the value of taxable municipal bonds, which may provide improved yields and credit quality, especially in a rate-cutting cycle. #FixedIncome #Bonds #PortfolioManagement #Munis #RealEstate #Credit

This Hispanic Heritage Month we’re proud to celebrate with Tanya Garzon co-chair of New York Life’s Latinos for Excellence, Advancement & Development employee resource group (ERG).

Check out Steven Friedman‘s latest post FOMC commentary below.