Passive Vs Active Fixed Income

The hidden dangers of fixed income investing.

Passive vs active fixed income. The historical record another misconception is that the passive versus active discussion is the same for fixed income fund managers as it is for. Passive etfs jan 28 2019 by larry berman in behavioural finance this week we talk to barry allan president ceo chief investment officer and founder of marret asset management a subsidiary of ci financial and manager of the first asset enhanced government bond etf fgo. Our fixed income investment team wrote an article highlighting the differences between active versus passive fixed income investing. The active versus passive management debate has always been an intriguing one in fixed income.

In the article they discuss the inherent weaknesses of the most commonly used fixed income benchmark the bloomberg barclays u s. The natural first hurdle is whether to invest in actively or passively managed funds. The active versus passive management debate has always been an intriguing one in fixed income. Passive fixed income.

Active versus passive management in 12 points. So you are underweight fixed income and want to invest. Active versus passive in fixed income by mark mitchell friday 26 apr 2019 9 57am given the recent passing of jack bogle who is largely considered to be the father of passive investing we felt it might be a reasonable time to look at passive versus active investing in fixed income purely on its merits from an investor s perspective. Low management fees and total expense ratios.

While passive management does seem to make sense in some equity markets we do struggle to see a compelling argument for passive management in fixed income when better performing active strategies are so readily available particularly in a low interest rate environment. On the one hand the allure of cheap market exposure to a low volatility asset class is tempting. Your exposure can materially change without you. Some of the reasons put forward for investing in passive funds including etfs are well known.