Philosophising about Fixed Income

Unconstrained fixed income, defined contribution and alternatives were just some of the hot topics discussed at three CAMRADATA events attended by The Lens over the past fortnight.

One of the themes at the top of many investors’ minds was the suggestion that unconstrained fixed income is perhaps a philosophy and not a category.

But whichever train of thought one subscribes to, when meeting managers in this asset class, The Lens found that discussion and transparency are key, as managers potentially may go up the risk curve in seeking yields and discover the joy of being benchmark agnostic.

A seminar on defined contribution pensions, meanwhile, brought together a diverse range of key topics from member engagement to the inclusion of millennials on trustee boards to help move the dial on driving forward the pension debate.

Another topic that led to much debate was how to accommodate illiquids in defined contribution default design.

Alternatives was mentioned across all three events  – with many voicing the opinion that asset classes that make up this segment are in fact mainstream and it is really about alternative mechanisms to seek alpha that we are talking about.

One panel session, attended by The Lens, discussed whether more education is needed within this grouping and perhaps more harmonisation would make life easier for us all.

In the Nordics, one attendee said, investors are using alternative allocations to tap into ESG and when managers are collating slide decks they shouldn’t just make the last two pages ESG relevant but incorporate this throughout the alternatives presentation.

Watch out for forthcoming whitepapers that will provide more colour on these topics!