Fixed income sits atop the DALI rankings with convertible bonds topping both the DALI and Asset Class Group Scores fixed income rankings.

• Although it has not reached the five-buy-signal margin to make it “official” Fixed income has moved ahead of cash to become the top-ranked asset class in DALI. Fixed income briefly moved to number one in March of this year; prior to that it had not reached the top spot since 2016.
• Within fixed income, US preferreds and convertibles currently sit atop the DALI rankings, followed by US corporates, and US high yield bonds.

• In a similar development within the Asset Class Group Scores (ACGS) system, the all fixed income group has crossed above the 4.0 score threshold for just the second time in its history; the last time the group moved above 4.0 was in March, around the same time fixed income reached the top of the DALI asset class rankings.
• Similar to the DALI fixed income rankings, and as we discussed last week, convertible bonds currently top the rankings of fixed income groups in the ACGS.

• However, inflation protection and US government groups sit just below convertibles in the ACGS with investment grade corporates a bit further back with an average group score of 4.42 and high yields further back with an average score of 3.63.
• Both DALI and the ACGS are clearly indicating that the area of highest relative strength within fixed income is convertibles bonds. In addition to the iShares Convertible Bond ETF ICVT discussed last week, those interested in adding exposure to convertible bonds can consider the First Trust SSI Strategic Convertible Securities ETF FCVT and the SPDR Bloomberg Barclays Convertible Bond ETF CWB.