Unconstrained bond funds gain momentum as investors turn away from benchmarks

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

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

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: