Bond Study Confirms Investment Approach and Offers New Insight
A new study identifies an additional metric—a bond issuer’s stock returns—that holds merit inevaluating fixed-income investments.
Dimensional, has used a systematic approach to pursue higher expected returns in fixed income since 1983. Just like in equities, we use information in current market prices to identify differences in expected bond returns.
There is abundant academic scholarship that supports this systematic approach to fixed income. A new study as part of continuing research from Dimensional supports it, too, and identifies an additional metric—a bond issuer’s stock returns—that holds merit in evaluating fixed-income investments.