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Abstract
Asset managers have reported demand from clients for so-called unconstrained bond strategies; freeing them from the rigidity of managing to benchmark bond indexes. The publication talked to five leading investment firms to get their take on the unconstrained movement. On what are the limitations of benchmarking to indexes, Loomis Sayles portfolio manager of Absolute Stratgies fund VP Matthew Eagan said yields are low, but there is pressure for rates to rise. So they are moving from a period where the wind was at their backs to one where it is in their faces. This requires investors to adopt a different, unconstrained approach with the remit to go long or short. Aviva Investors head of credit Mark Wauton said far from being representative of what they may define as corporate credit, many of these indexes are not necessarily representative of credit as an asset class; but embedded financial-type risk.