The Great Realignment: One Approach To Unconstrained FI Investing

Despite tapering, investors can expect to be in for a sustained period of low interest rates, and in such a situation eking out a better return on a fixed income investment can be a challenge.

Traditional bond funds, which are benchmarked to indices such as the Barclays US Aggregate Index, suffer from interest rate risk and lack the flexibility to adjust their portfolios on the fly when the interest rate regime hardens.

Fixed income investing: Benchmark-agnostic strategies

These are fixed income investing strategies that are not linked to a single fixed income index or sector as in the case of a traditional bond fund.

Also called “go-anywhere” funds, these unconstrained funds can be actively managed by skilled portfolio managers to take into account...