Thanks to the use of Strategic Beta indices, it is possible to re-compose aggregate bond benchmarks, which are composed of all types of high grade tradable debt instruments, so as to target an enhancement of their risk-return profile through improved allocation of risk/yield budgets. In the following example,
Reduce risk | Increase return | Optimize income | |
Equities |
Equity factor Low Volatility |
Equity factor Value Equity factor Momentum Equity factor Quality Size (Equal Weight) |
Dividend strategy |
Bonds | Quality-Weighted Sovereign Bonds | Yield Plus | Yield Plus |