Fund selectors are increasingly looking to active fixed income managers as uncertainty over interest rates and inflation continues, according to research from Rathbones Asset Management.
The survey found 81% of respondents expect active managers to play a bigger role in fixed income portfolios over the next two years, supported by flexibility around duration and credit quality.
Duration management emerged as a priority, with 27% of fund selectors describing it as essential and a 69% more considering it very important.
It found 94% viewed strategic bond mandates capable of shifting between government bonds, investment grade credit and high yield debt as attractive.
91% of respondents agreed that active credit managers are better placed to avoid asymmetric downside risk amid narrow credit spreads.
Active allocations set to rise in 2027, fund selectors’ survey shows
96% of respondents said they valued the ability to hedge currency exposure within a global bond allocation.
The research surveyed 100 independent financial advisers, discretionary fund managers and private banker fund selectors.
Bryn Jones, head of fixed income, Rathbones Asset Management, said: “Fund selectors clearly recognise that, in the current environment, active management has an important role to play in bond portfolios. With the path of rates and inflation still uncertain, the ability to actively adjust duration and credit exposure is becoming an
increasingly important part of portfolio construction. This is not simply about seeking income, but about being selective, managing downside risk and identifying where compensation is attractive. These findings underline the value investors place on flexibility and specialist expertise when navigating changing market conditions.”
