Let your bonds work smarter
Let your bonds work smarter
Active management can turn fixed income into a more purposeful allocation
Fixed income is often viewed as the stable anchor of a portfolio – an asset class that quietly does its job in the background. Yet in practice, bonds respond quickly to shifting rate regimes, credit cycles and geopolitical events. Treating fixed income as ’hold and forget’ may leave opportunity on the table.
Fixed-income markets are fragmented and inefficient, giving active managers scope to add value. Active bond managers can identify and mitigate both interest rate and credit risk in order to add value. - In addition to security selection active bond managers can derive alpha by applying flexibility in duration, yield curve, sector and currency.
- Index replication in the bond market can be costlier and more challenging than in other markets due to transaction costs and liquidity.
- Higher risk sectors such as emerging market debt and high yield can offer idiosyncratic opportunities and an Unconstrained strategy can pursue the most attractive investment opportunities across market cycles.
