Building an Active Fixed-Income Investing Process on a Foundation of Behavioral Finance

In investing, risk has many faces, but all risks have one thing in common: uncertainty over the future course of events. Markets change, the economy evolves, policy responds, and exogenous shocks can come from anywhere. Most recently, markets were shocked by vulnerability in the banking sector, which itself was precipitated by extraordinary monetary easing in response to the pandemic, followed by aggressive monetary tightening in order to rein in runaway inflation. We don’t know where the next crisis will come from, but as an asset manager it is our responsibility to make sure our clients are best positioned to minimize risk and maximize return potential in good markets and bad.

We created a working system that shows behavioral science can deliver real-world solutions.