The bond strategies for distorted markets

Amid the rise of unconstrained fixed income funds and index strategies, it is easy to forget benchmark-relative, active fixed income mutual funds remain popular with investors - and with good reason.

Benchmark-relative strategies help investors identify the active risks a manager is taking and enable them to better understand managers' investment styles. Fund mandates are well-defined and easily-understood, and comparing the performance of funds managed relative to the same benchmark is a reasonably straightforward exercise. Some investors simply feel more comfortable having clear parameters around the bond allocations in their portfolios. However, fixed income markets are constantly-evolving and those funds managed relative to traditional bond benchmarks may not be equipped to...