Factor investing, a strategy that squeezed active asset managers and helped drive the rise of passive investing, is the latest concept to be exported from equity markets to fixed income, thanks to a data boom. Quant house AQR launched its first dedicated fixed income offering in mid-2016, outperforming the benchmark index by an average of 2.35 percentage points per year and going on to launch two more bond funds. Federal requirements since 2002 to disclose transaction prices and volumes have enabled closer analyses. The new generation of quantitative funds has been able to tap into this market because they are not limited to just one or two asset classes.
Factor investing, a strategy that squeezed active asset managers and helped drive the rise of passive investing, is the latest concept to be exported from equity markets to fixed income, thanks to a data boom. Quant house AQR launched its first dedicated fixed income offering in mid-2016, outperforming the benchmark index by an average of 2.35 percentage points per year and going on to launch two more bond funds. The new generation of quantitative funds has been able to tap into this market because they are not limited to just one or two asset classes.