01
RISING CORRELATIONS
Periods of higher equity-bond correlation have challenged conventional diversification assumptions, increasing interest in alternative sources of return and portfolio diversification.
GAM SPECIALIST FIXED INCOME
Is your fixed-income
allocation prepared?
GAM helps investors prepare for a wider range of potential outcomes with a broader fixed-income toolkit.
WHY NOW
What investors are preparing for
At GAM, we believe building portfolios for a wider range of outcomes requires looking beyond traditional fixed-income allocations. Geopolitical uncertainty, evolving inflation and interest-rate regimes, elevated market concentration and shifting correlations continue to challenge conventional portfolio assumptions. While investors cannot predict what comes next, they can assess whether their portfolios are sufficiently diversified, resilient and positioned for a broader range of market environments.
The environment that supported traditional bond diversification for much of the past four decades has evolved. With government bond yields exposed to fiscal and inflation pressures and credit spreads near multi-decade lows, investors are increasingly exploring specialist fixed income for differentiated sources of income, return and diversification. GAM's specialist fixed-income platform provides access to a range of complementary strategies, each drawing on distinct underlying drivers of risk and return.
02
INTEREST-RATE RISK
Further increases in yields could present challenges for traditional fixed-income allocations, particularly those with greater duration exposure.
03
TIGHT CREDIT SPREADS
Tighter credit spreads are prompting investors to look beyond core markets for additional income and excess-return opportunities.
MARKET RESILIENCE
Different return engines, different outcomes
During periods of market stress, specialist fixed-income strategies have historically responded differently depending on their underlying return drivers, creating opportunities for diversification and resilience.
Source: Bloomberg, GAM, as at 30 June 2026. N/A indicates that the AT1 CoCo index does not have sufficient history covering the Global Financial Crisis period; therefore, no drawdown data is shown.
Click on an asset class to see the index used as its proxy.
Past performance is not a reliable indicator of future results and the value of investments may fall as well as rise.
THE OPPORTUNITY SET
What role should fixed income play in your portfolio?
Each of our specialist fixed income strategies draws on a different underlying source of risk and return.
Investment Partner
Cat Bond & Insurance-Linked Securities (ILS)
Diversification driven by insurance risk, not corporate
credit.
Catastrophe bonds (cat bonds), co-managed with Swiss
Re, provide access to return drivers linked primarily to
natural catastrophe risk, creating diversification
opportunities largely independent of traditional financial
markets.
In-house Capability
Securitised Income
Income and diversification from US residential mortgages and
securitised credit.
Specialist US securitised credit investing across
residential mortgages, commercial mortgages and asset-backed
securities. Exposure to underlying cash flows and security
structures can create differentiated sources of income and
return beyond traditional bond markets.
Investment Partner
Financial & Subordinated Credit
Look across the capital structure, not just conventional
corporate bonds.
Managed by Atlanticomnium since 1985, the strategy
invests in subordinated debt issued by investment-grade banks
and insurers, taking an opportunistic and value-driven approach
to identifying attractive income opportunities.
Investment Partner
Emerging Market Debt
One asset class. Multiple sources of opportunity.
Managed by pure-play emerging markets specialist
Gramercy, chaired by Mohamed El-Erian, the strategy draws on
country, rates, credit and currency opportunities across hard-
and local-currency sovereign debt markets.
Investment Partner
Global Rates
Diversification driven by macroeconomic and policy
differences, not credit risk.
Active positions in government bonds, yield curves and
currencies seek to exploit differences in monetary policy,
economic conditions and market expectations across regions
and countries.
PORTFOLIO DIVERSIFICATION
Different return drivers across 20 years of market cycles
Long-term correlation analysis of specialist strategies against traditional benchmarks highlights how distinct return drivers can enhance portfolio diversification and resilience.
| Asset Class | Mortgage-BackedUS MBS | Insurance-LinkedCat Bond | Subordinated DebtAT1 CoCos | Sovereign & CorpEM Debt | Liquid AlternativeMacro Systematic |
|---|---|---|---|---|---|
| US High Yield | 0.24 | 0.28 | 0.76 | 0.64 | 0.03 |
| US Leveraged Loans | -0.04 | 0.30 | 0.69 | 0.38 | -0.01 |
| S&P 500 | 0.20 | 0.25 | 0.63 | 0.57 | 0.10 |
| MSCI AC World | 0.22 | 0.26 | 0.68 | 0.63 | 0.14 |
| Commodities | -0.04 | 0.19 | 0.29 | 0.30 | 0.21 |
Source: Bloomberg, GAM, as at 31 August 2026. Correlations for AT1 CoCos are based on available index history from 31 December 2013 onwards. Correlation characteristics are based on historical observation and may change over time. Indices used: US High Yield (ICE BofA US Higy Yield Master II Index in USD); US Leveraged Loans (S&P/LSTA Leverage Loan Total Return in USD); S&P 500 (S&P 500 in USD); MSCI AC World (MSCI AC World Index in USD); Commodities (Bloomberg Commodity Index in USD); US MBS (ICE BofA US Mortgage Backed Securities Index); Cat Bond (Swiss Re Cat Bond Total Return Index); AT1 CoCos (iBoxx USD Contingent Convertible Liquid Developed Markets AT1 Index); EM Debt (JPM EMBI Global Diversified Index); Macro Systematic (HFRX Macro/CTA Index (USD)).
Cat Bonds & Macro Systematic
Natural catastrophe risk and macro/systematic trend signals have historically operated independently of corporate default risk and equity market drawdowns.
US Mortgage-Backed Securities
Has historically provided income with low equity correlation and negative correlation to leveraged loans, while remaining insulated from corporate credit risk.
AT1 CoCos & EM Debt
Offers spread premium and cycle-linked return potential for allocations seeking yield enhancement.
WHY GAM
Access specialist expertise
GAM brings together specialist in-house investment teams and carefully selected investment partners, providing institutional access through robust governance, risk oversight and client-focused solutions.
PEOPLE
Specialist teams and investment partners selected for deep expertise in a specific investment capability.
THINKING
Portfolio-construction insights that start with investor objectives and allocation needs, not individual products.
OPPORTUNITIES
Access to differentiated sources of return beyond traditional government and corporate bond markets.
STRUCTURES
Institutional-quality vehicles, governance and oversight designed to support long-term client outcomes.
FIXED INCOME INSIGHTS
Understand the challenges and opportunities
shaping fixed income today.
12 OCTOBER 2026
Surprisingly Predictable: 25 Years of Catastrophe Bond Returns
Natural catastrophes are unpredictable. However, the behaviour of the asset class of financial instruments that cover natural catastrophe risk - catastrophe bonds (cat bonds) - has historically exhibited a notably consistent pattern. That apparent contradiction is central to the investment case.
29 SEPTEMBER 2026
Optimising fixed income allocations in a new market regime
With benchmark government yield curves relentlessly trending upwards and core markets credit spreads at 19-year lows, the need for specialist fixed income solutions offering contained interest rate risk, substantial excess spreads, intact valuation profiles and true diversification benefits remains, in my view, pressing.
SPEAK TO OUR TEAM
Is your fixed-income allocation prepared?
Explore how specialist fixed-income capabilities may support portfolio diversification, income generation and portfolio resilience.
Email: clientservice@gam.com
Phone: +44 (0) 20 7493 9990
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BEYOND FIXED INCOME
More ways to prepare your portfolio
Alternatives
Diversification beyond traditional asset classes through commodities, global macro, private markets and alternative return strategies.
Active Equities
Active stock selection focused on identifying long-term opportunities across global, regional and thematic equity markets.
Multi-Asset
Multi-asset portfolios built on a disciplined institutional investment process, designed to balance risk and return across market environments.