Deep Dive: MAC and ARFI better together?

No need to compete

Andres Sanchez Balcazar of Pictet Asset Management dives into the Absolute Return sector.

At a time when positive inflation-adjusted returns are in short supply, bond investors have turned to strategies that have the flexibility to invest in different types of fixed income, the most popular of which are multi-asset credit (MAC) and absolute return fixed income (ARFI). Both have plenty of commendable traits, but they need not compete for investors' capital. Combining the two can improve a bond portfolio's diversification and increase its overall risk-adjusted returns over the long run. This is because MAC strategies tend to do particularly well when interest rates and bond spr...