Reviewing the Primary Roles of Core Fixed Income

April 2017
Core fixed income exposures, as proxied by the Bloomberg Barclays Aggregate Index (“Aggregate”), are found in many investors’ portfolios. Aggregate exposures tend to serve four primary roles in portfolios including 1) source of income, 2) source of liquidity, 3) capital preservation and 4) diversification relative to risk assets. Recent changes to the Aggregate’s interest rate duration, or sensitivity to changes in interest rates, have the potential to impact these four primary roles. This paper focuses on core fixed income as defined by the Aggregate, as this asset class tends to be an “anchor” in many investors portfolios.


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