In a paper produced as part of the research chair on “The Case for Inflation-Linked Corporate Bonds: Issuers’ and Investors’ Perspectives” at EDHEC-Risk Institute, supported by Rothschild & Cie, EDHEC-Risk researchers have provided a comprehensive analysis of the sources of added-value of corporate bonds for institutional investors.

The paper, “Analysing and Decomposing the Sources of Added-Value of Corporate Bonds within Institutional Investors’ Portfolios,” finds corporate bonds to be attractive additions to investors’ portfolios:

• Introducing corporate bonds in performance-seeking portfolios (PSPs) typically generates positive benefits from an asset-liability management perspective since it will lead to substantial improvements in hedging benefits, which come at the cost of a less-than-proportional reduction in performance compared to equity-dominated portfolios.