Will Active Always Win in Fixed Income?

schwartzfinal
Executive Vice President, Global Head of Research
05/08/2018

Our podcast last week featured an interesting discussion with Andrew Baron, CIO of Butterfield Asset Management, and Jon Heckscher, Senior Vice President and Director of Fixed Income and Investment Strategy at Pennsylvania Trust.

 

Baron and Heckscher are long-time friends and former colleagues, as Heckscher recruited Baron to work for him in Bermuda years ago and Baron still resides and works in Bermuda.

 

We discussed global portfolio strategies, the fixed income markets and much more in this podcast. Some of the additional topics we covered:

 

  • A high-level view of equity markets being attractive or, at minimum, neutral, with longer-duration assets being less attractive to Baron and his substituting more alternative, lower-volatility alternatives instead.
  • A discussion on active vs. passive in the fixed income market and what factors one might focus on to add value in the fixed income market.
  • How investment-grade fixed income indexes have been changing and quality has been deteriorating with the rise of lower-quality bond issuance.
  • How equity factors can be used to look at investment-grade space, as well as a debate about which market is a leading indicator—the equity market or the fixed income market.
  • How much of portfolio allocations should be in alternative volatility-reducing investments and how much in gold.

Listen to the full conversation below.

 

About the Contributor
schwartzfinal
Executive Vice President, Global Head of Research
Jeremy Schwartz has served as our Executive Vice President, Global Head of Research since November 2018 and leads WisdomTree’s investment strategy team in the construction of WisdomTree’s equity indexes, quantitative active strategies and multi-asset model portfolios. Mr. Schwartz joined WisdomTree in May 2005 as a Senior Analyst, adding to his responsibilities in February 2007 as Deputy Director of Research and thereafter, from October 2008 to October 2018, as Director of Research. Prior to joining WisdomTree, he was head research assistant for Professor Jeremy Siegel and helped with the research and writing of Stocks for the Long Run and The Future for Investors. Mr. Schwartz also is co-author of the Financial Analysts Journal paper, What Happened to the Original Stocks in the S&P 500? He received his B.S. in Economics from The Wharton School of the University of Pennsylvania and hosts the Wharton Business Radio program Behind the Markets on SiriusXM 132. Mr. Schwartz is also a member of the CFA Society of Philadelphia.