Are Higher Fixed Income Allocations Warranted Today?
In this note, we compare the equity/fixed income efficient frontier of today with that of 2021. We find that higher bond allocations may help investors pursue long-term return objectives with lower risk.
Authors
-
Systematic Edge Team
10/26/2023
20 min read
Topic
Fixed Income
Key takeaways
- The efficient frontier for bond/equity portfolios has shifted northeast from December 2021 to August 2023.
- This shift is due to higher expected cash returns and higher expected returns and volatility for risk assets.
- We conclude that a greater reliance on bonds is warranted for a range of desired investor outcomes on a go-forward basis.
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