Are You Buying What They're Selling? We’re Not—Here’s Why.
Fixed income benchmark construction has two fundamental flaws. First, exposures prioritize the needs of borrowers rather than investors. Second, this tends to expose investors to the biggest risks at the worst times.
7/8/2025
13 min read
Topic
Fixed Income
Key takeaways
- Unlike portfolios based on standard equity benchmarks, benchmark-driven bond portfolios are shaped by the needs of bond issuers—not the goals of bond investors.
- As market composition changes over time, portfolio exposures shift—often in ways that increase risk and reduce return potential for fixed income investors.
- We believe dynamically allocating capital across global fixed income sectors can help generate a more consistent return stream while mitigating volatility.
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