While factor investing has gained in popularity among equity investors, its range of application is not limited to one asset class. Indeed, BNP Paribas Asset Management has been developing factor-based strategies in fixed income since 2009, initially on government bonds and currencies and more recently on corporate bonds.
Here we show that factor investing can not only be applied successfully to fixed-income markets, it is also an approach that is fundamentally different from – and complementary to – what active managers do.
