Value Oriented Bond Management Amid Economic ChaosLearn more about this firm
Hollywood loves a good "standoff," that moment when actors face each other with guns drawn, waiting for someone to make a move. The standoff between Congress and the White House over the debt ceiling, however, is hardly welcome news for fixed income investors who are already swimming against a rising tide of factors that make investing increasingly challenging.
Whether it’s ten straight interest rate increases pushing rates to a 16-year high, persistent inflation, bank failures or the war in Ukraine, investors face an abundance of hazards that highlight the critical need for fixed income investors to take a nimble approach. While markets are often efficient, times like these expose a number of select areas within the bond market that exhibit less efficient behavior. Investors taking a value oriented bond management approach may find ways to exploit the inefficiencies.
While traditional bond management generally focuses on macroeconomic, interest rate forecasting, yield curve forecasts and sector expectations, value oriented bond management, as we define it, is an approach to bond selection and management whereby a unique value opportunity related to a particular bond issuer or issue is identified.