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Joined-up fixed income diversification


Dan James

Dan James of Aviva Investors looks at how global diversified fixed income can provide a coherent solution in the search for alpha.

Rather than simply being a choice between sovereign debt or credit, fixed income offers a wide choice of asset types and sources of returns that can be accessed by skilled, alphagenerating fixed income teams.

Aviva Investors’ outlook for most asset classes suggests that returns will be lower than those that investors have come to expect, with shorter and more volatile investment cycles. In view of this, investors should consider broadening their return sources to make good use of the opportunities available and reduce the volatility of returns.

However, it is important to ensure that the component parts of a diversified portfolio work together to produce the desired level of risk/ return and make the best use of risk budgets. Global diversified fixed income provides one such co-ordinated approach. It is designed to bring together the best investment ideas from autonomous and relatively unconstrained alpha-generating fixed income teams into a coherent, risk-controlled portfolio that also incorporates a market returns (beta) replication strategy.

Aviva Investors, Alpha, investment services, sovereign debt

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