ETF experts reconsider traditional portfolio strategies for 2024.

Fixed income products have been popular among investors this year due to high rates and persistent inflation, but two experts advise reevaluating the allocation strategies.

The unexpectedly cooler CPI print in October suggests that the Federal Reserve may soon end its interest rate hike campaign. Dan Egan, Vice President of Behavioral Finance and Investing at Betterment, advises investors to start preparing for a lower-rate environment now.

This week, he told CNBC's "ETF Edge" that they were at the top of the mountain and that people should start considering if interest rates will decrease in the next 2 to 3 years, and what good moves they should make now to prepare.

The yields of money market funds this year have been competitive with the federal funds rate, which reached 5% in October. However, as of Wednesday's market close, the 10-year note fell to 4.408%, while the average yield of the 100 largest taxable money market funds tracked by Crane Data is 5.20%.

This year, nearly $1.2 trillion has been invested in money market funds, compared to $264 billion in bond funds and $43 billion in U.S. equity funds, according to Goldman Sachs.

Matt Bartolini, Head of SPDR Americas Research at State Street Global Advisors, stated in an interview that the growing importance of ETFs from a portfolio perspective represents a strategic use case for those flows into fixed income.

As the Federal Reserve considers lowering interest rates, the appeal and returns on fixed income products like money markets may decline.

He stated that if interest rates decrease, we can expect to see a rise in equities and people taking on more risk. However, if one stays within fixed income, they must be in the 1- to 10-year space to achieve a high level of income.

Bartolini advised clients seeking higher returns to consider shorter-term bond funds.

He suggested using an actively managed strategy with a total return mindset for a 1- to 3-year duration to achieve higher yield while mitigating duration-induced volatility.

The stock that tracks shorter-duration notes has gained 0.22% this year as of Wednesday's close, while the stock with exposure to Treasurys ranging between 1 and 30 years in duration was down 1.85% during the same period.

Egan concurred that investors could start preparing to assume more risk.

To be more opportunistic with your higher-risk budget, set up mental accounts and goals that will give you a sense of security and protection from short-term risks. Do this now so that when the opportunity arises, you are prepared to take action.