YOUR PORTFOLIO
Fixed income
Performance of sector vs index over 10yrs
ICE BofA Global Corporate ( 53.9 %) IA Global Corporate Bond ( 49.4 %)
70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 %
-10%
Sep12 |
Sep13 |
Sep14 |
Sep15 |
Sep16 |
Sep17 |
Sep18 |
Sep19 |
Sep20 |
Sep21 |
Source : FE Analytics
almost-identical part of the market for 10bps . That ’ s just one example .” Another benefit of a broader product universe , which Hughes sees as particularly pertinent in today ’ s rising yield environment , is the ability to take more nuanced bets in areas where specific value is sought . This is opposed to a broad-based active manager running a generic UK corporate bond fund , who might include “ a bit of everything ” and whose overall duration may be longer than is optimal .
Passive developments have enabled fund selectors and wealth managers to implement their views with greater precision than ever before . “ We now have more tools at our disposal that give us a better chance of getting it right ,” Hughes adds . “ We ’ ve held short-dated US Treasuries , which cost just 6bps to implement . That precision , targeting specific durations in specific areas of the market , flexibly and at a low cost , has helped us navigate the volatility this year .”
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