Passive Fixed Income

Liabilities from fixed-income securities

The indexation of fixed income securities requires skills and market knowledge. A passive pension fund can sound safe and boring. But in reality, index tracking on fixed income securities is not easy, and such funds can indeed be quite risky. Our argument is that the time for passive fixed-income investments is coming to an end. What is the position of the Schroder Fixed Income Fund?

Loans are different: 12 points for active and passive management

In recent years, opinion has diverged between Poland and the rest of the world in the active-passive debates on investments. Going back to this conversation, we juxtapose equities and debt. Looking at the key figures, we find that unlike their equities equivalents, over our sampling horizon we have largely exceeded their average passive peak. Here we provide assumptions about why debt and equities differ.

We believe at the micro levels that a passive pure markets would lead to significant risks and misallocation of resources. From a realistic perspective, neither passive nor actively invested companies can fully rule in balance. Naturally, passive managers have their own strengths. However, there is good cause to believe that unaudited passive leadership can promote freeriding, disadvantageous choices and ethical risks.

A proactive stance can take advantage of rewards that are not available to passive fixed income fixed income fund managers. Capability to capture, organize and use information is crucial for making capital investments and delivering customer outcomes. You should aim for a flexible borrowing policy in unstable market conditions with the freedom to take advantage of opportunity across the entire fixed income world.

A number of different determinants are associated with general market conditions or the execution of a particular asset allocation that cannot be fully considered in the production of simulation results and that can all negatively impact outcomes. Managerial Risks is the risks that the investing technique and analysis used by an Asset Managers may not deliver the results expected and that certain guidelines or trends may influence the investing technique available to the Asset Managers in relation to the administration of the strategies.

Every investment involves certain inherent dangers and can depreciate in value. Investment in the debt markets is exposed to various types of exposures, which include exposure to markets, interest and principal markets, issuers, credit, price, currency and other inflationary pressures. Interest changes affect the value of most debt instruments and investment policies. Long-term debt and investment policies tended to be more fragile and more volatile than shorter-term ones; debt levels generally decline as interest levels increase and the currently low interest level exacerbates this exposure.

Ongoing reduction of borrowing capacities of counterparties may lead to lower levels of cash flow and higher pricing levels. Fixed income assets may be more or less valuable than the initial redemption value. There may be certain expenses and exposures associated with derivative instruments, such as cash, interest rates, markets, credit, managements and the exposure to the possibility that a derivative instrument will not close when it is most favourable.

It is not guaranteed that these policies will work under all prevailing markets or that they are appropriate for all types of investments, and each individual should assess his or her capacity to make long-term investments, particularly in times of economic downturns. Before making an investor's choice, you should contact your local asset manager.

These materials are provided for information only and should not be construed as a solicitation or endorsement of any particular securities, strategies or products.

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