Key Takeaways

Our new AI-Assist model, trusted in the Growth Portfolio since 2019, now protects your Income Portfolio by anticipating credit risk and acting swiftly to safeguard your capital.

Powered by insights from over 4,000 global news outlets and social media sources, AI-Assist automatically shifts your investments to safety at the first sign of market stress.

Introducing AI Assist for the MYTHEO Income Portfolio

In today's fast-moving and unpredictable markets, success requires more than traditional investment strategies. At MYTHEO, we are committed to pushing the boundaries of what is possible. That is why we are proud to introduce a major enhancement to the MYTHEO Income Portfolio: the integration of our new AI-Assist model.

AI-Assist is not entirely new to MYTHEO investors. Since 2019, it has been a proven success in our Growth Portfolio, where it acts as a crucial protective layer. By continuously monitoring market sentiment, AI-Assist identifies assets at risk of a significant sell-off. When such risks emerge, the system automatically reduces or removes the asset from the portfolio, helping to safeguard investors' capital.

Managing Risk in a Bond Portfolio

For experienced fixed income investors, the key to success in managing bond portfolios lies in expertly managing yield spread. The yield spread is the difference in yield between a corporate bond and a less-risky benchmark, like a Treasury bond of similar duration. It represents the extra return, or risk premium, that investors demand for the possibility of a company defaulting.

A narrowing spread is a sign of a healthier market, indicating that risk is perceived to be lower. This causes the bond's price to increase. Conversely, a widening spread is a cause for concern, signalling a deteriorating economic outlook and a higher risk of default, which leads to falling bond prices. This is precisely the kind of risk our new AI-Assist model is designed to do.

How AI-Assist Works for Your Income Portfolio

The AI-Assist model for the Income Portfolio builds on the same advanced artificial intelligence used in the Growth Portfolio but has been custom-designed for fixed income. It draws on the same powerful data and machine learning methods, yet it is tailored to identify assets where spreads are likely to widen. By detecting these risks early, the system reduces portfolio exposure, helping to cushion against negative impacts before they affect returns.

Unlike traditional bond analysis, this model focuses on the Option-Adjusted Spread (OAS). OAS provides a deeper and more accurate assessment of bond valuation by accounting for embedded options, such as the issuer's right to redeem the bond early (call option) or the investor's right to do the same (put option).

The Data and Logic Behind the Model

Data Inputs

The model draws its strength from LSEG MarketPsych Analytics, a sophisticated engine that tracks sentiment scores across more than 4,000 global news outlets and social media platforms. To complement this, it also incorporates the VVIX Index, which measures the volatility of the VIX Index, often referred to as the market's "fear gauge." While the VIX shows the level of fear, the VVIX reveals how quickly that fear is changing. By combining these two sources, the model gains a deeper and more comprehensive view of human emotion in financial markets. This allows it to anticipate shifts in sentiment and potential market stress with greater accuracy.

Core Objective

The model's primary goal is to predict whether the Option-Adjusted Spread (OAS) on high-yield bonds will widen within the next month.

Automated Action

When the model forecasts such a widening, it triggers a defensive adjustment by reducing exposure to high-yield ETFs such as HYG, SRLN, and SJNK. At the same time, it reallocates capital into safer assets like the Vanguard Short-Term Treasury ETF (VGSH). This automated action helps protect the portfolio from potential drawdowns while maintaining stability in volatile conditions.

Source: GAX MD, July 2025

Your Financial Peace of Mind

At MYTHEO, we never stop raising the bar for our clients. The launch of AI-Assist in our Income Portfolio, effective August 1, 2025, marks a powerful step forward in how we protect and grow your wealth. By harnessing advanced machine learning, we are not just responding to market shifts but staying ahead of them. This means stronger risk management, smarter allocation, and greater consistency in returns, even when markets turn uncertain.

For investors, this is more than an upgrade. With AI-Assist actively working behind the scenes, your portfolio is designed to capture enhanced returns while safeguarding your capital. It is innovation working for you, giving you the confidence and peace of mind to invest more boldly today for a more secure tomorrow.

Discover how MYTHEO can enhance your portfolio diversification today and embark on your financial journey with confidence. Take the first step towards your financial goals now .