The Active vs Passive debate has been a longstanding feature of the investment landscape. Within the fixed income universe, the arguments have become more nuanced, particularly as the indexed approach has eaten into the market share of active managers. But investors have increasingly recognised that it is not an either/or debate; both fixed income approaches have a place in investors’ multi-asset portfolios.
Key points to note:
The bottom line: By incorporating some indexing elements in both FI core and satellite programs and utilizing indexing to rebalance a portfolio, we demonstrate that we can improve the portfolio’s return/risk ratio by lowering the portfolio risk but without sacrificing the portfolio return.
Learn more about the benefits that can accrue to investors by diversifying fixed income exposure with the addition of indexed strategies.