Episode 72: Rising Rates Pushing Investors Back to Core Bonds

In this episode of the InsuranceAUM.com Podcast, host Stewart Foley, CFA, is joined by Wesley Pate of Income Research and Management (IR&M) to explore the evolving role of core fixed income in insurance portfolios. As inflation hits a 40-year high and rates rise, Wesley explains why this environment may not be as challenging for insurers as it seems, thanks to the long-term benefits of reinvesting at higher yields.

They discuss the importance of duration-neutral strategies, the return of core bonds as a favored allocation, and how insurers are adapting to regulatory changes like the new NAIC RBC rules and S&P’s proposed capital model. Wesley also highlights the resurgence of municipal bonds, attractive opportunities in securitized assets, and the growing relevance of ESG as part of insurers' investment strategies. Whether you’re a fixed income geek or simply interested in understanding the dynamics of today’s bond market, this episode offers valuable perspectives for navigating the complexities of core fixed income investing.