The Case for Active Management in Fixed Income
Not all asset classes are created equal. Some markets are highly efficient, with fewer securities, transparent pricing, and a broad, unconstrained investor base. Others are less efficient, with a larger number of securities, less transparency, and more structural constraints on investors.
Generally, passive investing works well in efficient markets. But in less efficient markets – such as corporate bonds – active management has the potential to deliver better returns and more effective risk management.
Despite this, most fixed income solutions available today are managed passively or, at best, in a quasi-passive manner. For example, the median turnover for corporate bond managers in the Canadian Corporate Fixed Income eVestment universe is only 0.75 times (barely once), a key indicator that many so-called “active” strategies may not be truly active.
Why Active Management Matters for Corporate Bonds
Corporate bond markets present unique opportunities for skilled active managers to generate additional value for investors. By carefully selecting securities, managing risk dynamically, and taking advantage of market inefficiencies, we aim to enhance returns and improve overall portfolio outcomes.
Our Expertise in Active Fixed Income Management
At RPIA, we specialize in actively managing corporate bond portfolios, leveraging deep expertise, a disciplined investment process, and cutting-edge technology to uncover opportunities. Our track record demonstrates the value we bring to clients through our unique approach to fixed income investing.