Science and technology have only recently begun to disrupt the active fixed income asset management industry. Does scientific fixed income investing represent the industry’s next frontier? Learn more

Companies within the Disruptive Innovation space have generated higher levels of idiosyncratic risk relative to broad markets and major asset classes, creating stronger alpha opportunity for skilled active managers…see the full story on our partner’s site

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Strategists for Goldman Sachs, Christian Mueller Glissmann and Peter Openhiemer, say that government bonds are failing to meet the traditional hedging requirements and to consider higher cash and equity allocations. There is still a small negative equity/bond correlation and investors shouldn’t leave the traditional 60/40 split immediately. There are other reasons to allocate more to equity though such as a higher equity risk premia. Inflation is eating away very low yields, making cash a better relative investment, and rate volatility could be even higher in the upcoming Fed cycle. If bonds/equity correlation moves to zero then a balanced portfolio is futile and cash is the safer option.

FINSUM: Investors should need to watch the real return on their fixed income investments and high yield debt might not be worth the risk to generate the ‘normal’ bond returns.

President Biden spoke at the Port in Baltimore to celebrate the passage of the $550 billion dollar spending bill which will allocate $17.1b to ports like the one he spoke at. In order to expedite the spending spree, the White House said that $240 million of the bill will be allocated to grants that they plan to move on in the next 45 days. The Biden administration sees port infrastructure spending as part of a key process to alleviate the supply constraints in the U.S. economy that are a key contributor to record inflation in many policy makers' eyes. The Bill is already facing criticism from former President Donald Trump who says only a fraction of the bill's allotment will be spent on infrastructure. However, it was 11 republicans who stepped across the aisle that was key to passing Biden’s first signature piece of infrastructure legislation.

FINSUM: It would be a big win for the U.S. economy if the infrastructure bill could make substantial gains toward reducing inflation which has markets flummoxed and consumers concerned.