Measuring What Matters In Public And Private Fixed Income
PIMCO·2026-05-27·via All Articles on Seeking Alpha
Summary
Despite the move lower late last week, U.S. Treasury yields are still holding well above recent lows and close to highs not seen in more than a year.
A passive vehicle has no selection mandate, yet it persistently lands below the benchmark – dragged down by fees, transaction costs, and sampling discrepancies.
With spreads at historically tight levels, the compensation for indiscriminate exposure is thin and the asymmetry unattractive.
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Key takeaways:
Bond benchmarks are useful but not investable: Because fixed income indices are essentially impossible to replicate in a portfolio, investors should consider more relevant comparisons to evaluate passive and active bond performance.
