Smart Beta for Corporate Bonds: Efficient Access to Premium Returns
Journal of Indexes, June 26, 2014
10 Pages Posted: 8 Feb 2017
Date Written: June 1, 2014
Smart beta corporate bond indices potentially offer a better risk/return profile than traditional market-value-weighted benchmarks. The simulated fundamentally weighted index described in this paper tilts toward less risky issuers, and periodically rebalancing to target weights provides a source of excess return by taking advantage of mean reversion in bond spreads.
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