The replay of our December 21, 2023 conference call titled Introducing Our Index & Our 2024 Outlook can be found below.
Summary Points
- Bianco Research is happy to announce the Bianco Research Total Return Index. Wisdom Tree has created an ETF to track this index, with a ticker of WTBN.
- The broad-based investment grade index uses five factors to drive total return: duration, yield curve, credit weighting, volatility of structure, and other factors.
- The investment committee updates the index positioning on their website, currently being slightly short of the benchmark, defensive on interest rates, and underweight on mortgages and structure due to high volatility.
- Yields could go to 5.5% by mid-2024, which is an outlier call based on the belief that the lockdown restart of 2020 changed economic trends.
- Three major changes – deglobalization, energy as an economic and political weapon, and remote work – have altered consumer behavior and market trends.
- We are in a multi-year bear market for bonds and the stock-bond correlation has shifted to positive, indicating a return to an inflation mindset.
- The economy will continue to grow around 2.5%, with inflation remaining around 3%, challenging the consensus view of a soft landing or recession.
- The index positioning reflects this outlook, with a defensive stance on duration and credit and an overweight position in short TIPS due to attractive yields and inflation protection.
Transcript
Handout
Audio Replay
Video Replay