Passive investing may not work for fixed income. But what does?

Passive investing poses a tremendous risk in the fixed-income market, says Senior Portfolio Manager Gene Tannuzzo. A traditional bond index is weighted toward the most indebted issuers and may not provide the risk diversification investors need. Tannuzzo describes a strategic beta approach as an alternative — one that uses rules-based filters to target a better balance of yield, quality and liquidity.