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Systematic Fixed Income:

The New Frontier for Investors

The world of fixed income investing is evolving. Systematic fixed income represents a dynamic new strategy that can help investors navigate this changing landscape and achieve their financial goals.

The New Frontier

Exploring the potential of systematic investing in fixed income markets.

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Expertise Meets Innovation

Integrating systematic strategies with traditional fixed income expertise.

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Uncorrelated Returns and Enhanced Diversification

Designed to outperform benchmarks with similar volatility.

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There is no guarantee that any investment objectives will be achieved.

What Is Systematic Fixed Income?

Systematic fixed income takes fixed-income investing to a whole new level. It harnesses the power of cutting-edge technology and data analysis to identify undervalued opportunities in the fixed income market. This active approach, driven by innovation, seeks to deliver positive alpha,* or excess return, for our clients.

A key benefit of systematic fixed income is its potential to offer valuable diversification by seeking to generate uncorrelated active returns. This means these returns have a low correlation to the traditional fixed-income active strategies in investors’ portfolios.

*Alpha is a measure of the active return on an investment, i.e., the performance of that investment compared with a suitable market index. 

Why Now for Systematic Fixed Income?

The systematic fixed income market is still early stage and presents an exciting opportunity for investors. A report published by Barclays† shows that assets under management in systematic credit mutual funds in the US have more than doubled over the past year, reaching around US$3.5 billion. The systematic approach offers a risk premium and return potential that is very attractive.

 †Source: LSEG Lipper and Barclays, as of December 31, 2023

The value of an investment can go down as well as up and investors may not get back the full amount they invested. Capital is at risk. Past performance does not guarantee future results.

The Systematic Advantage: Innovation Meets Expertise

At AllianceBernstein, we combine expertise with innovation to deliver high-quality systematic fixed income solutions.

Integrated Expertise

Our systematic team collaborates seamlessly with seasoned fixed income professionals. This powerful blend ensures the same robust execution capabilities as our traditional portfolios.

Extensive Experience

Over 20 years’ experience in quantitative research allows us to identify complex relationships within the market.

Cutting-Edge Infrastructure

Our abAlphaLabs platform facilitates rapid adjustments and testing of our strategies, helping them to remain effective.

 

The Diversification Power of Systematic Fixed Income

Our systematic fixed income products are designed to deliver consistent performance, aiming to outperform while maintaining benchmark-like volatility levels. Here's what sets our systematic fixed income products apart:

Uncorrelated Active Returns

Our strategies exhibit low correlation with traditional active fixed income, designed to enhance portfolio diversification and risk-adjusted returns.

Distinct Factor Exposures

We go beyond traditional factors, focusing on a broader range, including proprietary measures, to capture less well-known market signals.

Upside Capture, Downside Mitigation

Our strategies seek positive alpha while targeting similar volatility to their benchmark index. This translates to capturing upside potential with lower downside risk compared to traditional fixed-income products.

 

The value of an investment can go down as well as up and investors may not get back the full amount they invested. Capital is at risk. There is no guarantee that any investment objectives will be achieved.

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This webpage has been prepared by AllianceBernstein Australia Limited (“ABAL”)—ABN 53 095 022 718, AFSL 230 698. Information in this webpage is only intended for persons that qualify as “wholesale clients,” as defined by the Financial Markets Conduct Act 2013’, and is not to be construed as advice. This webpage is provided solely for informational purposes and is not an offer to buy or sell securities. The information, forecasts and opinions set forth in this webpage have not been prepared for any recipient’s specific investment objectives, financial situation or particular needs. Neither this webpage nor the information contained in it are intended to take the place of professional advice.
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