The 7 Immutable Laws of Developed Market Fixed-Income Dominance
The developed market fixed-income landscape demands active management to overcome the pitfalls of passive strategies. Traditional approaches often expose portfolios to overexposure in highly indebted entities. Superior returns hinge on mastering three Core alpha sources: security selection, sector allocation, and duration management.
Duration leverage requires precise adjustments based on macroeconomic forecasts, particularly in volatile rate environments. Credit selection remains paramount, with rigorous issuer analysis to mitigate business, liquidity, and covenant risks. Navigating global monetary policy divergence is critical, especially amid persistent inflationary pressures.
Sector optimization involves systematic screening across government, corporate, and securitized debt to identify relative value opportunities. Disciplined execution across these dimensions separates elite fixed-income managers from the crowd.
