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Alpha Exchange

Karishma Kaul, Head of Systematic Fixed Income Strategies, Fidelity Investments

Sep 22, 2023
Karishma Kaul, Head of Systematic Fixed Income Strategies at Fidelity, discusses the role of common factors in fixed income factor investing, including value, momentum, and quality. She explores the challenges of implementation and potential return dampening due to crowding. Karishma shares her background in engineering and experiences in finance. The podcast also covers indexed-based distortions in fixed income and initiatives for women in finance.
58:09

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

  • Factor investing in fixed income is still a nascent strategy, with potential for delivering incremental risk-adjusted returns through key factors like value, momentum, and quality.
  • Implementing factor strategies in fixed income requires careful consideration of trading frictions, liquidity, and transaction costs.

Deep dives

Fixed income factor investing is a nascent strategy

Factor investing in equities has been well established, but in fixed income, it is still an emerging strategy. Karishma McCall, head of Systematic Fixed Income Strategies at Fidelity, discusses the potential of factor investing in fixed income. She highlights key factors such as value, momentum, and quality, emphasizing the importance of each factor in delivering incremental risk-adjusted returns. She also explains that combining factors can further enhance the value due to their low correlation. However, implementing factor strategies in fixed income requires careful consideration of liquidity and trading frictions.

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