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    Systematic fixed income – introducing an effective rules-based approach to high yield

    Systematic fixed income – introducing an effective rules-based approach to high yield

    01 May 2024 Fixed income
    Systematic fixed income is an alternative approach to high yield investing that has the capacity to bring a number of attractive benefits, whether targeting benchmark returns or outperformance.

    Applying quantitative, rules-based structures to high yield investing may allow investors to achieve more attractive returns profiles as they enable better access to the full credit risk premium.

    By adopting a credit portfolio trading framework, systematic fixed income can provide other benefits by achieving trading cost savings and enhanced liquidity through being able to trade efficiently and quickly in greater volumes.

    A systematic approach can help by delivering sufficient alpha to overcome the cost drag for those seeking passive, benchmark returns. By extension, it can also deliver against alpha objectives, as well as producing greater diversification by having lower correlations with other traditional active management approaches.

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