More than ever, investors need to consider exploring alpha-focused strategies in an effort to achieve competitive performance. These strategies should be overseen by skilled active managers who have the latitude to dynamically adjust their portfolios in an effort to extract value from duration positioning, credit analysis, yield curve exposure and security selection. The choices fixed income investors make today will have significant implications for performance and diversification benefits going forward.
Jim Caron is senior fixed income portfolio manager at Morgan Stanley Investment Management.