Today’s market environment poses some acute problems for fixed income investors, from the perspective of both the asset manager and the end investor. For bond managers, the present tight-credit-spread, low-volatility environment creates substantial challenges to achieving a compelling active return within a responsible level of risk. End investors, on the other hand, are equally challenged in their medium-term and long-run return goals by the overall low yields on offer, and by the probability that bond prices will decline in the future. Russell has responded on both fronts. This paper explains how.

Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.