Yield and Mellencamp

Yield and Mellencamp

Do you remember the classic Mellencamp album “Nothing Matters and What if it Did” released in 1980? Sure you do. It has that widely-underappreciated song “Ain’t Even Done with the Night” on it. Yes, I’m a big Mellencamp fan and maybe you’re not.

Well that album title kept coming to mind as Mike and I have spoken with dozens of FAs across projects. Nothing Matters and Find Me Yield. That would be the industry’s version of this album. This demand for yield is unwavering and consistent across FA channels and across the country.

Three considerations for asset managers:

  1. In searching for yield, many advisors are open to pretty esoteric investment strategies such as MLPs and non-agency MBS.
  2. FAs are oversaturated with whitepapers related to yield. Metrics, such as duration and credit quality, are more important than whitepapers.
  3. There’s receptivity to vehicles beyond open-end mutual funds. ETFs, closed-end funds, even structured products (just once) came up.