Blending Active and Index Building Blocks for Better Fixed Income Outcomes

Although the active versus passive management debate persists, more sophisticated investors are finding that the real question is not whether to choose active or passive strategies, but how to combine the best of both approaches in a holistic way to construct the optimal portfolio from a return, risk, and cost perspective. In this paper, we look at where active managers have and have not performed, what has been driving the shift towards fixed income indexing, and consider how a blend of active and index strategies can be incorporated into a fixed income portfolio.