Oksana Aronov, fixed-income strategist for J.P. Morgan Asset Management, says “manager experience is key” as the Federal Reserve begins tightening and global central-banking policy continues to diverge. This video was uploaded a few days before the Fed formally terminated its quantitative easing (QE) program, and Ms. Aronovo was among the majority of forecasters who saw the end of QE coming (it was “telegraphed” in her words). She also says that the Fed’s “tightening” policy going forward has stressed the need of fixed-income diversification, and flexibility moving between fixed-income assets to capitalize on opportunities – hence, an experience manager is needed.
“If you’re trying to identify the manager who has the ability to be that diversifier in your portfolio, you have to look for someone with experience in alternative markets,” Ms. Aronov says. She also says you should look for managers who have a “dollars-at-risk approach” to managing your money: “Their neutral point for risk should be cash, not a market-driven benchmark.”