Oct 21, 2026 · 26 min
Higher yields reopen the case for active bond investing
Fixed Income Conversation Corner with Lindsay Rosner (GSAM) and Leslie Falconio (UBS CIO)
After a difficult stretch for duration-heavy bonds, elevated yields may offer income and entry points—but inflation, geopolitics, and policy shifts keep positioning highly consequential.
- 1Higher yields and persistent inflation have pressured duration-heavy benchmarks, while geopolitical risks complicate central-bank policy.
- 2Credit markets, including investment grade, commercial mortgage-backed securities, high yield, and emerging markets, offer historically attractive income levels.
- 3Investor-specific positioning, municipal bonds, tax-loss harvesting, and active management may matter as volatility persists and yields potentially decline.
Don't miss
Lindsay Rosner lays out why elevated yields across several credit markets may offer better entry points despite continued uncertainty.
The brief
Leslie Falcone of UBS and Lindsay Rosner of Goldman Sachs Asset Management examine why higher yields, persistent inflation, and geopolitical risks have made fixed income unusually volatile.
Duration-heavy benchmarks such as AGG have lagged as yields moved sharply, producing negative total returns and forcing investors to reassess the risks of broad bond exposure.
The speakers see historically attractive yields across investment grade, commercial mortgage-backed securities, high yield, and emerging markets, even as uncertainty remains.
Their central distinction is between market-wide exposure and investor-specific positioning: munis, tax-loss harvesting, and active management may help navigate continued volatility.
The conversation ends with a cautiously constructive view that supportive household and corporate balance sheets could coexist with lower yields over time.
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