menu
 

Systematic Fixed Income:

The New Frontier for Investors

 

The world of fixed income investing is evolving. Systematic Fixed Income represents a dynamic new strategy that can help investors navigate this changing landscape and achieve their financial goals.

The New Frontier

Exploring the potential of systematic investing in fixed income markets.

View Video
Expertise Meets Innovation

Integrating systematic strategies with traditional fixed income expertise.

View Video
Uncorrelated Returns and Enhanced Diversification

Designed to outperform benchmarks with similar volatility.

View Video

There is no guarantee that any investment objectives will be achieved.

What is Systematic Fixed Income?

Systematic Fixed Income takes fixed income investing to a whole new level. It harnesses the power of cutting-edge technology and data analysis to identify undervalued opportunities in the fixed-income markets. This active approach, driven by innovation, seeks to deliver positive alpha*, or excess return, for our clients.

A key benefit of Systematic Fixed Income is its potential to offer valuable diversification by seeking to generate uncorrelated active returns. This means these returns have a low correlation to the traditional fixed-income active strategies in investors’ portfolios.

*Alpha is a measure of the active return on an investment, i.e. the performance of that investment compared with a suitable market index.

Why now for Systematic Fixed Income?

The Systematic Fixed-Income market is still early stage and presents an exciting opportunity for investors. The systematic approach offers a risk premium and return potential that is very attractive—and very different from other fixed-income solutions.

Today’s environment increases potential alpha from security selection. Active systematic fixed-income approaches may help investors harvest these opportunities as they focus on generating alpha through assessing and ranking individual securities.

Systematic strategies rely on a range of predictive factors, such as momentum, that aren’t efficiently captured through traditional investing. What’s more, systematic strategies aren’t swayed by the headlines that drive investor emotion. Because systematic approaches depend on different performance drivers, we believe their returns complement traditional active strategies.

The value of an investment can go down as well as up and investors may not get back the full amount they invested. Capital is at risk. Past performance does not guarantee future results.

 

The Systematic Advantage: Innovation Meets Expertise

At AllianceBernstein, we combine expertise with innovation to deliver high-quality Systematic Fixed Income solutions.

Bernd Wuebben
Director—Systematic Investing and Quantitative Research

Integrated expertise

Our systematic team collaborates seamlessly with seasoned fixed income professionals. This powerful blend ensures the same robust execution capabilities as our traditional portfolios.

Extensive experience

Over 20 years’ experience in quantitative research allows us to identify complex relationships within the market.

Cutting-edge infrastructure

Our abAlphaLabs platform facilitates rapid adjustments and testing of our strategies, helping them to remain effective.

What is abAlphaLabs?

abAlphaLabs is our proprietary hub for quantitative intelligence. It synthesises our quantitative model output and makes it readily available to our portfolio managers, analysts, and traders in real-time. This platform enables us to extract valuable information from data, providing an infrastructure for scalable and robust factor testing.

Included within abAlphaLabs is abSimulator, a sophisticated proprietary simulation platform that operates on a CUSIP-by-CUSIP basis and is aware of transaction costs.

The Diversifying Power of Systematic Fixed Income

Our Systematic Fixed Income strategies are designed to deliver consistent performance, aiming to outperform while maintaining benchmark-like volatility levels. Here's what sets our Systematic Fixed Income products apart:

Souheir Asba
Portfolio Manager 
 
 
Uncorrelated active returns

Our strategies exhibit low correlation with traditional active fixed income, designed to enhance portfolio diversification and risk-adjusted returns.

Distinct factor exposures

We go beyond traditional factors, focusing on a broader range, including proprietary measures, to capture less well-known market signals.

Upside capture, downside mitigation

Our strategies seek positive alpha while targeting similar volatility to their benchmark index. This translates to capturing upside potential with lower downside risk compared to traditional fixed-income products.

 

The value of an investment can go down as well as up and investors may not get back the full amount they invested. Capital is at risk. There is no guarantee that any investment objectives will be achieved.

 

Our Systematic Fixed Income Strategies

By incorporating Systematic Fixed Income into your portfolio, you gain access to a new frontier of investment opportunities. Find out more and consider their potential to enhance returns and broaden diversification in your portfolio.

AB Euro Corporate Bond Portfolio
Learn More
AB USD Corporate Bond Portfolio
Learn More

Some of the principal risks of investing in the Portfolios include Convertible securities risk, Concentration risk, Currency risk, Debt securities risk, Derivatives risk, Depository receipts risk, Emerging-markets risk, Hedging risk, Leverage risk, Market risk, Prepayment risk, Sustainability risk and Systematic/Quantitative Model risk. A full explanation of the risks is provided in the Portfolio’s Prospectus.

The Portfolio is meant as a vehicle for diversification and does not represent a complete investment program. Prospective investors should read the Prospectus, which includes Sustainability-Related Disclosures, and discuss risks and the Portfolio’s fees and charges with their financial advisor to determine if the investment is appropriate for them.

AB Euro Corporate Bond Portfolio and AB USD Corporate Portfolio are sub-funds of AB SICAV I, an open-ended investment company with variable capital (société d’investissement à capital variable) incorporated under the laws of the Grand Duchy of Luxembourg.

The sale of AB funds may be restricted or subject to adverse tax consequences in certain jurisdictions. This information is directed solely at persons in jurisdictions where the funds and relevant share class are registered or at those who may otherwise lawfully receive it. Before investing, investors should review the Fund’s full Prospectus, together with the Fund’s KIID or KID and the most recent financial statements. Copies of these documents, including the latest annual report and, if issued thereafter, the latest semiannual report, may be obtained free of charge from AllianceBernstein (Luxembourg) S.à r.l. by visiting www.alliancebernstein.com or www.eifs.lu/alliancebernstein, or in printed form by contacting the local distributor in the jurisdictions in which the funds are authorised for distribution.

The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams and are subject to revision over time. There is no guarantee that any projection, forecast or opinion in this material will be realised.

Systematic Fixed Income FAQs

Systematic fixed-income investing is an active approach that aims to beat bond benchmarks by harnessing the power of predictive factors. It’s a data-driven, rules-based investment approach that uses quantitative models to identify undervalued bonds and manage risk consistently. Unlike traditional discretionary strategies, systematic fixed income relies on technology, research, and predefined signals to make portfolio decisions with discipline and objectivity.

Traditional active fixed-income strategies rely heavily on human judgment, macro views, and duration or sector positioning. In contrast, systematic fixed-income investing uses quantitative models to drive security selection and portfolio construction. This approach seeks to remove human bias, improve consistency, and uncover opportunities that may be overlooked by discretionary managers.

One of the key benefits of systematic fixed-income investing is its ability to generate uncorrelated returns. Because portfolio decisions are driven by many independent data signals from the bottom up, systematic approaches can behave differently from traditional bond funds.  This helps to improve portfolio diversification and so reduce reliance on top-down sources of return such as yield-curve and interest-rate strategies.

Yes, systematic strategies are designed to generate alpha by exploiting structural inefficiencies, pricing anomalies, and factor-based signals within fixed-income markets. By continuously scanning global bond markets using quantitative tools, these strategies aim to generate excess returns above traditional benchmarks over a full market cycle.

 

The value of an investment can go down as well as up and investors may not get back the full amount they invested. Capital is at risk. There is no guarantee that any investment objectives will be achieved.

This is a marketing communication. This information is provided by AllianceBernstein (Luxembourg) S.à r.l. Société à responsabilité limitée, R.C.S. Luxembourg B 34 305, 2-4, rue Eugène Ruppert, L-2453 Luxembourg. Authorised in Luxembourg and regulated by the Commission de Surveillance du Secteur Financier (CSSF). It is provided for informational purposes only and does not constitute investment advice or an invitation to purchase any security or other investment. The views and opinions expressed are based on our internal forecasts and should not be relied upon as an indication of future market performance. The value of investments in any of the Funds can go down as well as up and investors may not get back the full amount invested. Past performance does not guarantee future results. 

This information is directed at Professional Clients only and is not intended for public use.

© AllianceBernstein L.P.