Active Managers Can Seek Value Beyond the Benchmark

  • The Bloomberg U.S. Aggregate Bond Index (the Agg), heavily concentrated in Treasury and Agency securities, represents less than half of the U.S. fixed-income market.
  • At Guggenheim Investments, we believe compelling opportunities exist outside the Agg, particularly in under-represented sectors such as asset-backed securities, collateralized loan obligations, high yield corporate bonds, and leveraged loans.
  • Moving beyond the benchmark expands the investment universe, offers greater portfolio diversification, and provides the potential for actively managed portfolios to generate attractive risk-adjusted returns.

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U.S. Fixed-Income Market = $59.5 Trillion

U.S. Fixed-Income Market = $59.5 Trillion

 

Source: Guggenheim Investments, SIFMA, Bloomberg, JP Morgan Research, BofA Global Research, Mortgage Bankers Association. Data as of 12.31.2024. The Bloomberg U.S. Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasurys, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS (agency and nonagency).

This information is subject to change at any time, based on market and other conditions, and should not be construed as a recommendation of any specific security or strategy. Investing involves risk, including the possible loss of principal. Investments in fixed-income instruments are subject to the possibility that interest rates could rise, causing their values to decline. High yield and unrated debt securities are at a greater risk of default than investment grade bonds and may be less liquid, which may increase volatility. Investors in asset-backed securities, including mortgage-backed securities and collateralized loan obligations (“CLOs”), generally receive payments that are part interest and part return of principal. These payments may vary based on the rate loans are repaid. Some asset-backed securities may have structures that make their reaction to interest rates and other factors difficult to predict, making their prices volatile and they are subject to liquidity and valuation risk. CLOs bear similar risks to investing in loans directly, such as credit, interest rate, counterparty, prepayment, liquidity, and valuation risks. Loans are often below investment grade, may be unrated, and typically offer a fixed or floating interest rate.

Guggenheim Investments represents the investment management businesses of Guggenheim Partners, LLC. Securities offered through Guggenheim Funds Distributors, LLC.

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Guggenheim Investments represents the following affiliated investment management businesses of Guggenheim Partners, LLC: Guggenheim Partners Investment Management, LLC, Security Investors, LLC, Guggenheim Funds Distributors, LLC, Guggenheim Funds Investment Advisors, LLC, Guggenheim Corporate Funding, LLC, Guggenheim Wealth Solutions, LLC, Guggenheim Partners Europe Limited, Guggenheim Partners Japan Limited, GS GAMMA Advisors, LLC, and Guggenheim Private Investments, LLC.

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