Efficient and Effective Indexing for Better Investor Outcomes
David M. Alongi, CFA
Director, Fixed Income Index Management
An intelligent Indexing approach and global platform drive efficiencies in fixed income index tracking by reducing costs.
Intelligent indexing is the skill it takes to manage index strategies effectively and cost efficiently so that investors can achieve their desired outcomes. Our integrated global platform is backed by significant scale, range and infrastructure.
- NTAM Fixed Income Index asset under management: $81.1B*
- Comprehensive asset class coverage and global trading operations
- Extensive range of investment vehicles to meet client needs
*As of December 31, 2022
Why Northern Trust Asset Management for Fixed Income Index Strategies?
Our investment philosophy and objective are executed through our three-faceted Intelligent Indexing® approach. A dynamic investment process, centered on efficiency, is designed to avoid unintended exposures, cost and tax implications.
- Minimize active risk
- Maximize liquidity
- Address the trade-off between active risk and transaction costs
- Manage market impact of trading
- Research ongoing index events
- Utilize integrated technology
Multi-dimensional Risk Controls
- Monitor portfolio daily
- Conduct both pre- and post-trade compliance
- Oversee performance on a continuing basis
Global Index Capabilities
A long, consistent track record tested over decades and market cycles
Bond performance turned positive to end 2022 while inflation moderated and the pace of rate hikes slowed. But interest rate volatility likely will persist in 2023, as monetary policy and recession fears may dictate returns.
With today’s low interest rates, investors can get tripped up by the 40% fixed income part of the traditional 60/40 portfolio. We look at some common misconceptions and offer ideas.
Worries of higher inflation hurt bond returns in the quarter, but credit spreads narrowed as the economic recovery took hold.
While most of our outlooks across sectors is negative for 2021, we think municipal bond market’s long-term strength continues.