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- 61% say changing liquidity levels pose a greater challenge; 42% cite broader geographic areas
- Risk control is most attractive quality of a fixed income strategy
According to new institutional research conducted by NN Investment Partners¹, the challenges facing bond fund managers are greater than they were a decade ago.
Its research reveals that 61% of institutional investors believe asset managers must address changing levels of liquidity better than they did 10 years ago while 42% said they have to be able understand and invest in wider geographies better than they did then. Other challenges cited that require greater attention included the ability to invest across wider credit ratings (39%) and managing overload (30%).
Respondents said the most attractive quality in the process of a fixed income strategy is risk control (57%), followed by a focus on controlling duration and matching liabilities (39%), the flexibility to invest in a wide range of investments (35%) and a focus on avoiding defaults (31%).
Sylvain de Ruijter, Head of Global Fixed Income at NN Investment Partners, commented: “Markets are in a very different place from where they were 10 years ago. Changes in global conditions, economic policies and financial markets have forced investors to adapt, and being able to adapt quickly will become an even more important skill.”
“Our research highlights that investors fully appreciate the difficulties in securing returns while managing risk. The new reality is that active management has changed, and investors recognise that they have to be prudent about partnering with the right asset managers.”
Whilst yield challenges remain, NN Investment Partners believes that there are still fixed interest opportunities without investors having to ramp up risk levels. Institutional investors will benefit from a partnership with fixed income experts who have a proven track record of identifying opportunity in adversity and translating that into returns. Indeed, NN Investment Partners’ investment process is based on detailed analysis of long- and medium-term fundamentals, aiming to provide its clients with consistently high yield.
NN Investment Partners’ fixed income boutiques have experienced management teams consisting of portfolio managers, analysts and strategists. These dedicated teams have a global presence with locations in The Hague, New York, London, and Singapore. With a proven proprietary investment process that has been honed over more than 20 years, the award-winning investment team’s experience and expertise is combined with a client-centric process that forges a partnership with customers to help them meet their investment needs through a platform of innovative products.
[1] Findings revealed in NN Investment Partners’ own research carried out in a survey by Citigate Dewe Rogerson amongst 103 international institutional investors in September 2015
