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Written by Jim Wiandt
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Monday, 20 April 2009 00:00 |
Welcome To The Fast Lane, Fixed Income
 Long the neglected stepchild of asset classes, suddenly fixed income is “it.” Although recent returns for the asset class as a whole have towered over those of equities, certain of the more scandalous fixed-income instruments have also been at the very center of the global meltdown. Or the beatdown, or recession or depression, or whatever you’d like to call the current unpleasantness. It’s all about bonds these days.
Indeed, completely flouting conventional wisdom, Rob Arnott demonstrates in this issue that bonds (the long-term variety) have outperformed equity over the past 40 years. Yes, you heard that right—40 years. So much for the idea that equities are a “sure thing” if you hold them long enough. Of course, whether or not that performance holds for the next 40 years is another question entirely, but Arnott thinks that may not be such a wild idea.
Following that attention-grabbing lead, we’ve got a lineup of some of the best and brightest minds around fixed-income index investing. First up is Ken Volpert, who runs all fixed income at Vanguard, with a debriefing on all of the excitement around fixed income from the fall of 2008. Following that, the Barclays Capital team (now the historic brain trust for fixed-income indexes) examines the state of the fixed-income market and includes their thoughts on where the industry is heading.
Next up is a real treat: 10 questions with Jack Malvey, the longtime director of the highly respected fixed-income research team at Lehman Brothers (which is now, of course, a part of BarCap). Jack’s got a lot to say, and he knows what he’s talking about.
After that we have a submission from Stephan Flagel and Neil Wardley of Markit, a fixed-income index upstart that is challenging the long-standing hegemony of the single-pricing source fixed-income index.
Rounding out the issue is S&P’s David Blitzer, who reminds us that, as an economist, his expertise extends beyond a certain 500 equities to include bonds, debt and the economy in general; and The Curmudgeon, who explores the profound linkage between fixed-income securities and … baseball.
So now that fixed income has got your attention, you’ve got a whole issue of JoI to help sate your appetite for it.
Jim Wiandt
Editor
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