The Best Investment Writing When the Market Outgrows the Index – David Vick, TCW
Aug 12, 2025
David Vick, Managing Director at TCW, shares his expertise in fixed income strategies. He explores the limitations of traditional bond indexes, emphasizing how they overlook high-yield and bank loans. Vick advocates for actively managed ETFs as a solution to tap into these underappreciated sectors. Additionally, he discusses how markets like the Nasdaq outpace older indexes and stresses the need for adaptability in index structures to meet evolving investor demands. His insights offer a fresh perspective on achieving better investment outcomes in a volatile landscape.
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Volatility Reveals Benchmark Blind Spots
- Recent fixed-income volatility highlights the AG's limitations as a benchmark.
- Nearly half the opportunities in fixed income aren't represented in the AG, creating blind spots for index-tied investors.
Aggregate Index Misses Nearly Half The Market
- The Bloomberg U.S. Aggregate (AG) no longer captures the full U.S. fixed-income opportunity set.
- Roughly 47% of U.S. fixed-income sectors sit outside the AG and remain unrepresented for many investors.
Index Rules Exclude Major Bond Sectors
- The AG's inclusion rules systematically exclude large sectors like CLOs, TIPS, high-yield, and floating-rate assets.
- Excluded sectors represent about $26 trillion in the U.S. and over $110 trillion globally.