First Trust’s Fulton explains systematic approach to interest rate risk
Derek Fulton (pictured), Chief Executive Officer at First Trust Global Portfolios believes that investors have become more concerned about taking excessive amounts of interest rate risk. However, there are ways of exposing a fixed income ETF to risk if done in a smart systematic way, he says.
“There is concern amongst investors that in the passive market capitalisation indices, their fixed income portfolios may be overloaded with sets of risks that are not balanced. Yet if they allocate to active investors, the risks in the portfolios are not transparent.”