The new face of fixed income
Fixed income's role in a fast-changing world
Even amid recent market volatility, fixed income continues to play a crucial role in any well-diversified portfolio. Designed to provide stability and income, fixed income helps to balance the risks associated with equities. Against rapidly evolving market and geopolitical conditions, the complexity and fragmentation of the bond market presents both challenges and opportunities for portfolio managers across active and index fixed income strategies.
What’s the secret to tight bond index fund tracking?
To understand the challenges of managing bond index funds, consider two data points: The Bloomberg U.S. Aggregate Bond Index contains more than 13,000 securities, while the CRSP U.S. Total Market Index comprises about 3,600 securities. The breadth of the fixed income market is just one of the challenges that bond index fund managers face.
Active Fixed Income Perspectives Q2 2025: Risks to realities
Explore how higher-quality bonds have outperformed amid declining Treasury yields and widening credit spreads, driven by tariff policy uncertainties and weaker consumer sentiment.
Fixed income and AI: Active risk-taking amid higher rates
Vanguard Global Chief Economist Joe Davis discusses a shift in the fixed income market as artificial intelligence progresses and highlights the potential for active risk-taking in a higher interest rate environment over the next decade.
Are investors paying too much for risk exposure?
Vanguard research has shown that credit risk is a greater performance differentiator than other commonly studied risk factors. Costs such as expense ratios present hurdles that active fund managers must clear if they are to outperform their benchmarks and peers.
ETF industry trends: Balancing risk and opportunity
Vanguard research examines in an uncertain rate environment, reasons to rethink allocations to Treasuries as the term premium returns. We also consider the risk of overconcentration in large-capitalization U.S. equities and whether ETF investors are adjusting the global allocation in their portfolios as a result.
Global bonds: Four key drivers of outperformance
Fixed income investors can benefit from expanding into global markets, where enhanced yield can be found, often without an increase to credit or duration risk. Key performance drivers include the premia in foreign currency bonds, geographic diversification, the variety of bonds on the international market, and currency hedging strategies.
