Filling Income Gaps Is Getting Easier. Bond Ladders Are a Popular Solution
Charles Sachs, Chief Investment Officer at Kaufman Rossin Wealth, has provided his insights for the online article published by Barron’s, “Filling Income Gaps Is Getting Easier. Bond Ladders Are a Popular Solution” written by David Sterman. The story details how income-generating vehicles such as bond ladders are playing a growing role in client portfolios, featuring a quote from Charles on the difficulty of lining up solid income payouts against client cash flow needs.
“While individual bond and bond ETFs can be helpful, they still offer yields that are below historical levels. In response, some advisors are migrating client portfolios to other fixed income solutions, such as private credit. Charles Sachs, chief investment officer at wealth management firm Kaufman Rossin, says that lining up solid income payouts against client cash flow needs ‘has been one of the most challenging things in my 20 to 30 year career to create.’
Private mortgages. In recent years, he has been investing a greater share of client funds in private mortgage funds, many of which are short-term (e.g. 2-3 years) and can yield 7% or more.
‘These funds allow you to diversify exposure to multiple loans and maturities,’ he says, adding that many of the funds ‘allow you to structure the payouts as needed.’ For clients that want to tap into the robust yields, but that don’t have near-term cash flow gaps to cover, these funds also allow for maturing proceeds to be reinvested.”
To read the full article, visit here.
Charles Sachs, CFA, CFP®, is a Chief Investment Officer at Kaufman Rossin Wealth, LLC, a Registered Investment Adviser.