Fixed income managers always want to have the flexibility to look for the best value across their investment universe, and in our view they therefore need the capacity to buy bonds in different currencies.
Fixed Income 101: Understanding bond duration
Duration is often said to measure a bond’s sensitivity to changes in interest rates, because it describes what is likely to happen to a bond’s price for a given change in the bond’s yield.
For fixed income investors, duration is a crucial metric for understanding how exposed your portfolio may be to changes in monetary policy.
Fixed Income 101: Comparing yields in different currencies
Fixed Income 101: Roll-down
Roll-down is the capital gain created by the natural fall in a bond’s yield as it approaches maturity. As a fixed income investor, it is probably the most you will ever get paid for doing nothing.
Fixed Income 101: Inflation-linked bonds
Inflation is widely understood to be bad for bonds. Fundamentally, this is because inflation erodes the value of the coupon and principal payments that fixed rate bondholders receive in the future.
Fixed Income 101: Trading ABS and CLOs
Bids Wanted in Competition (or BWIC) lists are a unique characteristic of the ABS and CLO markets, where they are widely used in secondary trading when investors are looking to sell bonds.
Fixed Income 101: Hedging currency risk
Hedging currency or foreign exchange (FX) risk is a key decision for any manager running a diversified fixed income portfolio. Currencies are inherently volatile, so whether and how FX risk is managed can have a material impact on a portfolio’s risk and return profile.
Fixed Income 101: Understanding bond yields and prices
Bond prices and yields move inversely to each other – as a bond’s price falls, its yield rises, and vice versa.