Absolute return is an absolute must is the title of this new white paper written at a time when traditional fixed income strategies and indices have become sources of ‘return-free’ risk.
Reflationary expectations and risk of inflation upside may have expedited the bear market for bonds and aggravated the challenges facing conventional fixed income investment strategies
In this environment, the case for absolute return strategies seems stronger than ever.
Absolute return strategies are doing what traditional fixed income was meant to do, that is
- Generating income: Their flexible, long/short approach is designed to generate returns in a rising rate environment
- Increasing diversification: These strategies are derived from fixed income and yet are completely uncorrelated to fixed income and other market betas
- Providing stability: Robust risk management and portfolio construction practices where no one theme, sector, style or strategy dominates.
Absolute return strategies are therefore an absolute must in portfolios designed to tackle investing in the post-COVID economy.
