PT Asset Management sees value in municipal bonds and high-quality credit

PT Asset Management CEO Sean Dranfield joined Proactive's Steve Darling to discuss the current bond market environment, the Performance Trust Total Return Bond ETF, and where investors may find opportunities amid ongoing uncertainty surrounding interest rates, inflation, and credit markets. Dranfield said the yield curve has flattened as short-term interest rates have risen more sharply than long-term rates, largely reflecting persistent inflation concerns. He noted that forecasting interest rates remains extremely challenging, even for central banks, making flexibility an important part of portfolio construction. “We're entirely rate agnostic. We don't believe anybody, including us, can predict rates,” Dranfield said. Rather than trying to anticipate rate movements, PT Asset Management focuses on building balanced portfolios that combine both offensive and defensive positioning. On the offensive side, Dranfield highlighted taxable and tax-exempt U.S. municipal bonds, which he believes currently offer attractive yields and favorable yield curve dynamics. For more defensive positioning, he pointed to high-quality structured credit, including commercial mortgage-backed securities (CMBS), collateralized loan obligations (CLOs), and selected short-duration bank bonds. He noted that corporate bond spreads have narrowed back to levels seen earlier in the year, limiting the additional compensation available for taking on lower-quality credit risk. According to Dranfield, investors can currently access yields in the 5% to 7% range while limiting both credit risk and interest rate sensitivity by emphasizing higher-quality, shorter-duration fixed-income investments. He also discussed the role bonds can play alongside equities, noting that high-quality fixed-income investments have historically provided valuable diversification and stability during periods of market uncertainty. #proactiveinvestors #hanetf #PTAssetManagement #BondETF #TotalReturn #ShapeManagement #InvestmentStrategies #BondMarket #InterestRates #USInvesting #StructuredCredit #EuropeanInvestors #FinanceInterview #MunicipalBonds #ETFInvesting #InterestRates #CreditMarkets #PortfolioManagement #IncomeInvesting #MarketOutlook