Unconstrained bond funds gain momentum as investors turn away from benchmarks

handcuff — Shackled to the index: the constraints on investors of benchmarking

Rob Davies
22 Jun 2011

Tweet
Facebook
LinkedIn
Save this article
Send to
Print this page

While there may be advantages of managing bond funds according to specific indexes – ease of performance comparison and asset-liability management being the two most obvious – these are outweighed by the limitations of such a rigid approach.

If the index does badly, it stands to reason that a strategy closely tied to it will too. And if that index is also skewed towards one particular sector – as many corporate bond funds have been to financials – then a lack of diversification is also likely to

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to print this content. Please contact [email protected] to find out more.

You are currently unable to copy this content. Please contact [email protected] to find out more.

You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/

If you would like to purchase additional rights please email [email protected]

You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/

If you would like to purchase additional rights please email [email protected]