Advisers and investors are increasingly focused on fixed income solutions that provide both reliable income and portfolio resilience. Andrew Stephens, EMEA Head of Distribution at Insight Investment (the centre of expertise for fixed income within BNY Investments) sat down with IFA Magazine’s Editor, Sue Whitbread, to explain not only how a research-driven, active approach to fixed income investment can enable advisers to deliver tailored outcomes particularly in uncertain market conditions, but also how it builds that important resilience within client portfolios.
Investors are focused on building portfolio resilience
Markets are uncertain, and advisers and investors are carefully assessing their portfolios to ensure they are well-positioned. “There are many economic and market uncertainties right now,” Stephens explains. “But perhaps the biggest theme we see investors wrestling with is how to build resilience into their portfolios.”
In conversations with clients, Stephens says, concerns often revolve around valuation and risk. “Clients examine equity market valuations which look stretched and then look at their fixed income portfolios. They ask themselves whether credit spreads are narrow and whether they are being adequately rewarded for the risk they are taking in credit markets. They also consider the duration of their fixed income holdings and whether that is delivering sufficient return for the risk.”
For advisers and investors responsible for risk-managed portfolios, these are fundamental questions. “They are asking how to create portfolios that can respond to changing market conditions. Establishing this resilience now gives them confidence that the portfolios can adjust as markets evolve and deliver the returns their clients need,” Stephens notes.
How investors are building resilience through active management
Investors are implementing multiple strategies to strengthen their portfolios and build resilience. Stephens cites some examples in this context saying, “In equities for example, downside protection is a conversation that has ramped up in terms of its frequency. We’re also seeing some investors think about tactical asset allocation implementation again, to be able to respond to the changing market conditions and build that resilience when it comes to their portfolio.”
For fixed income specifically, shortening duration is one approach Stephens highlights. “Investors concerned about sensitivity to interest rates are actively adjusting the maturity profiles of their holdings. This allows them to reduce risk while maintaining exposure to income opportunities,” he says.
There are many economic and market uncertainties right now, but perhaps the biggest theme we see investors wrestling with is how to build resilience into their portfolios
A second major trend is moving from passive to active management. Stephens acknowledges that this may seem counterintuitive when thinking about portfolio resilience. “The reason investors are doing this is that an active manager can shift portfolio composition in response to market conditions. This adds a layer of flexibility that helps portfolios adapt and reduces exposure to areas of heightened risk. Alternative exposures are also being used to build greater resilience,” Stephens explained.
Investors are also moving away from strictly benchmark-relative approaches and toward total-return strategies, where there is much more flexibility in the fixed income portfolio. “By setting an objective for the manager and giving them the freedom to allocate across credit sectors, sovereign bonds, and other fixed income instruments, advisers allow managers to pursue opportunities where they see value and avoid areas where risk is elevated. This flexibility strengthens resilience while keeping the portfolio aligned with client goals,” he said.
The value of research-driven active management
Stephens is a strong believer that research-driven, active management is central to this approach. “Our philosophy is bottom-up, research-driven, and evidence-based,” he says. “It is a disciplined approach that applies consistently across global markets, across credit qualities and is combined with robust risk management. Because fixed income is our core focus, we view the reliability of delivering performance for investors as a responsibility we bear every day.”
This research-driven approach clearly gives advisers confidence too. “By applying proprietary insights, research and economic principles consistently, we aim to ensure that our fixed income strategies are managed in a repeatable and predictable way. We can identify opportunities and manage risks effectively across diverse fixed income markets. Advisers can therefore be confident that the portfolios we manage are designed to achieve the outcomes they require for to meet clients’ needs, whether that’s for income or capital preservation,” Stephens notes.
Optimism about fixed income opportunities
Looking ahead to 2026 and beyond, Stephens is optimistic about the opportunities that exist in fixed income. “Over the past few years, investors have allocated more capital to their fixed income portfolios. This reflects both the evolving rate cycle and recognition of the multiple roles fixed income can play within broader portfolios,” he says.
Stephens contrasts this with passive, benchmark-relative approaches. “While these strategies still provide diversification, correlations with equities have risen, which can reduce their effectiveness. But are they still going to play the same sort of diversification role that they have in the past? The answer to that is no, not right now in this environment. Income is available in fixed income again, but portfolios need flexibility to allow managers to act where it is most effective. This discretion is where active management can deliver real excess returns and advisers stand a better chance of getting the results that they want. That’s where I’m most optimistic about the powerful role that fixed income can play in investment portfolios.”
Strategic bond funds as a flexible solution
In terms of solutions, certain funds illustrate the value of flexibility in fixed income. “Flexible fixed income, particularly strategic bond funds for example, allows managers a high degree of discretion across global government and credit markets,” Stephens explains.
Strategic bond funds are designed to deliver specific outcomes for investors. “They aim to act as a one-stop solution for fixed income allocations, providing both dynamism and flexibility to capture opportunities as they arise. This is an effective way for advisers to build resilience into client portfolios while maintaining exposure to income and potential growth opportunities.”
The emphasis is on outcomes rather than benchmarks. “With strategic bond funds, investors set a return objective and allow managers to deploy their expertise across markets to achieve it. This flexibility, combined with risk management, ensures portfolios are well-positioned to deliver for clients under varying market conditions,” Stephens says.
Our research-driven approach gives advisers confidence that portfolios deliver the outcomes clients need
“However, a strategic bond label doesn’t guarantee the same outcome” Stephens continues, “What truly differentiates a strategy is how it delivers return. In practice, our approach to strategic bond portfolios is built on small, repeatable incremental gains rather than directional calls. For many years, we have applied this philosophy in managing sizeable mandates for institutional clients, where consistency and downside risk management matter as much as return generation. This same institutional discipline sits at the core of how we support advisers today; helping them build resilient portfolios designed to weather uncertainty, capture income and compound performance steadily over time.”
Supporting advisers with flexible, outcomes-focused solutions
Advisers and wealth managers are clearly important to BNY Investments. “The intermediary sector is a strategic priority for us, and we work closely with advisers and their teams to that end,” Stephens emphasises. “Our goal is to ensure that our fixed income solutions align with advisers’ clients’ long-term objectives, supporting them to deliver appropriate outcomes-focused results which really suit their clients’ needs.”
When it comes to how the BNY team supports advisers, Stephens said: “We begin by listening carefully to advisers to understand their goals, concerns, and investment horizons for clients. Once we understand what they are trying to achieve, we share our insights based on experience working with clients across the globe. This is a collaborative, two-way education process rather than a prescriptive approach.”
Strategic bond funds offer the flexibility to capture opportunities while protecting income and growth
Helping advisers define the purpose of fixed income in client portfolios is also key. “We work with advisers to articulate whether fixed income is intended for income, diversification, or capital growth. Understanding and communicating these objectives ensures that clients are confident in the portfolio strategy and the role that fixed income plays within it. We work hard to ensure that advisers are confident in our underlying investment process. It’s important that our research driven, predictable, robust, consistent process, reassures them that when we’re managing money on their behalf, we’re going to deliver what we say we’re going to deliver”, he says
This philosophy extends to portfolio management. “Our research-driven, active approach focuses on generating reliable, consistent excess returns. We do not chase returns where they are not well rewarded. Our aim is to create meaningful contributions to portfolios while giving advisers confidence that the outcomes we deliver are predictable, robust, and aligned with client objectives. That’s what really matters,” Stephens notes.
By combining flexibility, rigorous research, and disciplined risk management, BNY’s Insight Investment helps advisers build fixed income allocations that are resilient and capable of delivering the desired outcomes, regardless of how market conditions evolve.
Conclusion
BNY Investments’ active, research-driven fixed income solutions aim to help advisers and wealth managers deliver resilient, flexible, and reliable outcomes for client portfolios. The integration of diversification, disciplined risk management, and close adviser collaboration underpins the firm’s long-standing focus on income delivery and capital preservation.
For advisers seeking a fixed income solution that adapts, responds and aligns to real client objectives, not just benchmarks, BNY Investments presents a compelling, outcomes-focussed, alternative.
Click here to learn more about BNY Investments
About Andrew Stephens CFA
Andrew joined Insight in July 2019 as Head of Distribution, EMEA. He is responsible for driving Insight’s business development strategy in EMEA and working with clients and their advisers in the delivery of outcome-oriented investment solutions. Andrew joined Insight having spent 19 years at BlackRock (including his time at BGI), where he held a number of senior distribution roles with oversight for business strategy, business development and client service for institutional clients. Andrew was also responsible for the launch and development of BGI’s Switzerland branch. Earlier in his career, Andrew led BGI’s performance measurement function, analysing and attributing investment performance across the asset class spectrum. He holds a B.Comm in Law from Stellenbosch University, South Africa and is also a CFA charterholder.
