Financial Education

When choosing a fixed income manager, some important points to consider include:

1. Outperformance net of fees is especially difficult for fixed income managers
2. Style analysis can indicate the ways the portfolio construction differs from that of the benchmark. Is the investor happy with these deviations?
3. Selection bets can be determined through return decomposition to identify whether the manager is skilled in credit analysis
4. The investment process should be understood to know the methods used and the drivers of alpha
5. If multiple managers are used, the alpha generated should not be highly correlated with that of other managers

For more information, see all articles on: FInancial Planning, Fixed income investments, Investing in bonds, Portfolio Management

See also:

Criteria For Selecting a Fixed Income Index

Optimizing Allocations to a Group of Equity Managers

Operating Leverage

Performance Attribution for Fixed Income Managers

Properties of a Valid Investment Benchmark