Equity mangers and bond investors generally pursue differing mandates. Equity managers seek opportunities to grow assets and are willing to risk the loss of capital to do so. Over a long term, the goal is to grow purchasing power (i.e., earn an after tax rate of return that exceeds the rate of inflation). Fixed income managers focus on the opposite side of the return distribution; capital preservation is their primary objective and capital appreciation is a secondary objective.
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Equity mangers and bond investors generally pursue differing mandates. Equity managers seek opportunities to grow assets and are willing to risk the loss of capital to do so. Over a long term, the goal is to grow purchasing power (i.e., earn an after tax rate of return that exceeds the rate of inflation). Fixed income managers focus on the opposite side of the return distribution; capital preservation is their primary objective and capital appreciation is a secondary objective.
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