Where Should Investors Land on the Aggregate Continuum?

January 14, 2026 | Frank Valle, CFA, CAIA, Associate Director of Fixed Income

Contrary to widespread belief, fixed income aggregate strategies offer a continuum of active risk and return profiles. While aggregate strategies broadly aim to provide income, diversification, and liquidity, varying degrees of excess return exist. Investors must choose what suits their active risk and return goals.

Fixed income mandates are described by their beta and benchmarked to a similarly named index. For example, long credit is benchmarked to the Bloomberg Long Credit Index and high yield is benchmarked versus the Bank of America High Yield Master II Index. Once a beta is selected, then an alpha objective is chosen for the mandate. Some mandates in the universe have an alpha target of benchmark plus 50 basis points (bps), while others target an excess return of 100bps or more.

However, this is not true for aggregate strategies. The beta and index are the Bloomberg Aggregate Index. Rather than having different objectives, aggregate mandates have different “asset classes.” The aggregate continuum should not be thought of as different asset classes, but rather different active risk and return profiles.

This white paper outlines considerations for investors when choosing a fixed income aggregate strategy, including an overview of the Bloomberg Aggregate Index, how investment managers can generate active risk, excess return targets, and the important distinction between risk and active risk.

Read > Where Should Investors Land on the Aggregate Continuum?