How are fixed income strategies impacted by the market environment?

• We take a closer look at fixed income performance and risk for five main types of strategies: money market, government bond, investment grade credit, high yield credit and relative value. 
• We analyse historical performance through various extreme market environments, which highlights the benefits and risks of the duration and credit exposures of the more conventional strategies.
• There isn’t a clear good or bad market for relative value strategies, but we highlight three links between the broader market environment and performance: 1) extreme low rates volatility is a negative; 2) higher rates volatility is generally positive, but not in all situations; 3) RV alpha is structural, but the mix of opportunities changes with broader supply/demand dynamics.