TY - JOUR T1 - 130/30 Fixed Income Investing JF - Special Issues SP - 115 LP - 118 VL - 2008 IS - 1 AU - Alan Wilde Y1 - 2008/06/20 UR - https://pm-research.com/content/2008/1/115.abstract N2 - This article presents the first explanation of multi-currency global fixed income 130-30 investing. Relaxing the long-only constraints can be beneficial for fixed income investors by providing greater symmetry of investment opportunity. One must look at the drivers of return for multi-currency global fixed income mandates and how these can benefit from a 130-30 investment approach. Just as the sources of excess returns for multi-currency fixed income mandates tend to be different from equivalent equity-only mandates, so too the potential benefits that a 130-30 approach can bring are different. In some cases these are analogous to 130-30 equity investing, but in others they are different, and it can be misleading to try to translate concepts from equity 130-30 investing to a multi-currency fixed income 130-30 approach. If one looks broadly at the five main sources of excess return for multi-currency global fixed income mandates, the conclusion is that a 130-30 approach should provide greater symmetry of investment opportunity and an advantage in four of these areas. In the fifth, duration management, it can be argued that in most cases there is already sufficient scope to outperform the market from management of duration against the benchmark. Given that active global fixed income managers already spend much of their time analyzing the relationship between markets and the main sources of excess return, this leads us to the conclusion that moving from long-only to a 130-30 approach for multi-currency global fixed income poses surprisingly few challenges to a top-down investment process, while removing the asymmetry of opportunities available. ER -