Will Active Always Win in Fixed Income?
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.