Goldman Sachs Identifies Key Income Opportunities for Investors in H2 2025

In a recent midyear outlook event, Goldman Sachs Asset Management outlined several attractive income opportunities for investors as they navigate a complex economic landscape characterized by uncertainty over tariffs and Federal Reserve monetary policy. Simon Dangoor, head of fixed income macro strategies at Goldman Sachs, emphasized the importance of the upcoming months in determining the impact of tariff policies on the economy.

During a meeting held on June 21, 2025, the Federal Reserve decided to maintain interest rates, though it anticipates potential reductions later in the year due to expected higher inflation and lower economic growth. This decision comes as the market awaits clarity on trade negotiations, particularly given President Trump’s approaching deadlines for tariff deals. According to Dangoor, “The next couple of months of data are going to be the proving ground for understanding how the tariff shock really is going to feed through the system.”

In this context, Dangoor indicated that income generation remains a focal point for investors, particularly as credit spreads have tightened. He noted, “Credit spreads have gone back to being frustratingly expensive, but we think that that’s underpinned by really quite good fundamentals in the corporate sector.” This sentiment reflects a broader perspective shared by various analysts who believe that disciplined corporate behavior offers a solid foundation for income-focused investment strategies.

Goldman Sachs has identified securitized products as particularly promising, with a focus on collateralized loan obligations (CLOs). These assets, especially AAA-rated CLOs, are seen as offering attractive income relative to risk. The Janus Henderson AAA CLO ETF (JAAA), for example, currently boasts a 30-day Securities and Exchange Commission yield of 5.35%. Dangoor highlighted the strong demand coupled with reasonably soft issuance of underlying bank loans as a factor contributing to the favorable outlook for CLOs.

Furthermore, Dangoor noted the potential in commercial mortgage-backed securities (CMBS), particularly those linked to single-asset, single-borrower deals with high-quality collateral. “If you’re prepared to do the underwriting work, [they] can give you some comfort about recovery to really all scenarios,” Dangoor advised, underscoring the importance of thorough analysis in investment decisions.

As the economic environment continues to evolve, financial advisors are increasingly turning to alternative asset classes for diversification and stability. This trend reflects a broader shift among investors seeking to mitigate risks associated with market volatility. According to Darla Mercado, a certified financial planner, “Financial advisors are turning to this asset class for diversification and stability as uncertainty rocks markets.”

In conclusion, Goldman Sachs’ insights provide a roadmap for investors seeking income opportunities amid economic uncertainty. With a focus on securitized products and careful credit assessments, investors can navigate the complexities of the current market landscape while optimizing their income potential. As market conditions evolve, ongoing vigilance and adaptive strategies will be crucial in achieving financial objectives in the latter half of 2025.