Fixed Income Asset
BondIT is the asset management software designed to optimize fixed income asset portfolios fast and effectively. Save time and resources using our standard fixed income analytics or work with us directly to tailor your data inputs and analysis to align directly with your business needs and the needs of your clients. Let BondIT do the analysis for you and deliver consistent investment optimization results helping you reach business goals and client goals simultaneously.
What is a fixed income asset class?
Fixed income asset investment is a form of investment which provides the investor with fixed-rate periodic interest payments as well as the eventual return of their capital investment. Fixed income bonds are the most common type of this investment class. Bond funds are essentially debt instruments. Companies and governments sell their fixed income asset to investors with the guarantee of making coupon payments (interest payments) over the bond period and then returning the original investment once the bond reaches its maturity date. The term of the bond can vary with typical periods ranging from 3 to 5 years.
There are three types of bonds: municipal bonds, corporate bonds to buy and government bonds. Government bonds, such as treasury bonds issued by the U.S. Treasury, are amongst the lowest risk fixed income securities to invest in. Because they are so low risk, however, they typically do not return a high yield. Fixed income high yield investment opportunities will typically come from the corporate bonds market. High yield fixed income instruments are typically higher risk investment opportunities with a low credit rating and higher interest rate. The risk of default is considerably higher for what is known as junk bonds or non-investment grade bonds. These are issued by start-ups and other overcapitalized firms seeking urgent cash flow. Bond ETFs, similar to bond mutual funds, hold a portfolio exclusively of individual bonds with different investment strategies managing short term and long term investor goals as well as a mixture of high yield bonds and safer, lower yield investments.
Common fluctuations which affect bond prices and the return on investment they offer include interest rate risk – when interest rates rise or fall, this can affect the overall value of the bond – as well as the risk of default. The role of the portfolio manager is to manage the various types of fixed income investments within a client’s portfolio to both meet and exceed that client’s investment goals.
What are asset classes?
An asset class is a way of grouping investments which share similar characteristics, and which are subject to the same laws and regulations. Fixed income asset classes comprise fixed income instruments which behave alike within the marketplace. There are three main asset classes: equities (stocks), fixed income investments (the bonds market), and money market instruments. It’s also possible to include real estate holding, commodities, futures and even cryptocurrencies.
When it comes to asset management for fixed income securities, this refers to the direction of all or part of a client’s fixed income trade portfolio. Not only does this mean that the investment firm managing this portfolio must decide which investments to make and which ones to avoid, but it also means that those decisions need to align with the client’s investment objectives. Traditionally, the fixed income portfolio management process requires rigorous research using both macro and micro fixed income analytics and asset management tools. The analysis includes statistical analysis of prevailing market trends as well as anything else that ultimately serves the need of the investor and the meeting, or even exceeding, of their individual goals.
Often, this analysis is undertaken by portfolio managers and client managers using offline solutions either created or inherited by in-house teams. Requiring hours of intensive study and analysis, the time is taken to evaluate fixed income ETFs, interest rate risk and cash flows can be inefficient, soaking up valuable resourcing time and increasing business costs. BondIT changes all of that. Our hosted asset management solution optimizes investment portfolios by connecting multiple sources of data and research to deliver optimized investment ideas which are aligned with any investment requirement. BondIT has been developed using cutting edge data science and software development methodologies to produce a powerful asset management tool that remains user friendly and data agnostic.
To create optimized portfolios, BondIT users leverage alternative data, proprietary insights, mandates and inventory. Our software solution rapidly constructs investment portfolios which take into account all aspects of your investment objectives and mandates, enabling you to more quickly and more thoroughly create investments strategies and proposals for fixed income markets.
BondIT does your analysis for you, generating actionable and compliant bond allocation proposals and fixed income options rapidly, significantly reducing time and resourcing costs. BondIT allows fixed income managers to connect to virtually any source of strategic data which is then used intelligently by the BondIT platform to deliver fixed income market proposals faster than ever before. We have developed a more intuitive way to optimize fixed income workflows so you can manage portfolio risk and portfolio optimization more quickly, consistently and more efficiently than ever before. To discover how BondIT can increase your business efficiency and help you to reduce time and resourcing costs, contact one of our consultants today. We’ll explain exactly how BondIT can increase your effectiveness, helping portfolio managers to reduce analysis time and giving client managers compliant proposals which align to client needs faster than ever before. Contact us today.