A plea for buying bonds in times of stock market volatility

Investors may want to consider bonds to help navigate the market’s recent volatility.

Joanna Gallegos, co-founder and CEO of BondBloxx, recommends prioritizing income and high-yield bonds.

“It can be really important to start looking at fixed income as you start to diversify and manage more risk,” she told CNBC’s “ETF Edge” on Monday.

Gallegos also proposes stepping out of the yield curve.

“Fixed income today is very different than it was two years ago,” she says. “We’re at the tail end of the big rate hike. So interest rates are high, and that makes a lot of difference in a portfolio today than when we started with rates near zero.”

PIMCO’s Jerome Schneider, who runs one of the largest actively managed exchange-traded bond funds in the world, also advises investors to look at bonds.

“They enter these market conditions with a generally underweight stance on fixed income,” said the firm’s head of short-term portfolio management. “What we see here is that there are better risk-adjusted returns when we have an actively managed, diversified fixed income portfolio than has been the case in many years.”

Schneider predicts the Federal Reserve will start cutting rates this year and warns that money market funds are likely to see interest rates ebb “pretty quickly.”

“We think favoring the front end of the yield curve is the most attractive at the moment,” Schneider said. “In the 2-, 3-, [and] With a five-year horizon, there are plenty of options in diversified portfolios to look at.”