Diversifying Beyond Duration: Smarter Risk Management in Bonds

AllianzGI’s Fixed Income Advanced Insights series, led by CIO Maxence-Louis Mormede, explores how bond investors can strengthen portfolios by moving beyond traditional risk drivers.

• Duration and yield curve factors explain around 95% of variance in US Treasury portfolios, but excessive reliance increases volatility.

• Broadening exposure to credit quality, sectors, currencies, and liquidity improves resilience and risk-adjusted outcomes.

• For institutions, optimizing return per unit of risk is more effective than pursuing absolute returns.

Which diversification levers hold the greatest potential for fixed income investors? The full report offers deeper guidance