Chapter Two

Systematic Fixed Income Strategies and Market Challenges

Systematic strategies are having a real impact on the industry.

Rather than replacing traditional approaches, they are automating them, enabling firms to process increasingly complex datasets at speed while still relying on human expertise to interpret and act on those insights.

Evidently, leaders are adopting systematic strategies in practice, revealing a market evolving toward a hybrid model in which technology enhances decision-making but does not replace it.

Leaders were asked to describe the role that systematic strategies play in their fixed income investment processes, and they highlighted that systematic approaches provide a clear edge in processing large, complex datasets and uncovering opportunities not visible through traditional analysis.

At the same time, firms emphasise that human judgment remains key to ensure insights are applied appropriately within broader investment strategies.

We asked respondents to describe the role that systematic strategies currently play in their firms' fixed-income investment processes and to share their primary motivation for expanding their use. Here is what they told us:

Read the Responses

Q: Select one statement from each of the following categories that best reflects your view of Fixed Income market transparency and one primary challenge.

A. Transparency

B. Pricing Challenge

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Expert Analysis

However, this evolution is taking place within a market that is still far from fully transparent. While 58% of respondents describe fixed-income markets as moderately transparent, 32% still see them as fragmented, and only 10% consider them highly transparent.

This fragmentation is most evident in the area that firms find hardest to price.

Private credit emerges as the single biggest pricing challenge (32%), followed by cross-asset correlations (27%), reinforcing the idea that complexity and opacity remain concentrated in specific market segments.

At the same time, firms are clear on what data matters most to improving pricing models, with trade prints (63%) and dealer quotes (56%) identified as the most critical inputs.

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Expert Analysis

Q: Where do you see the most pricing inefficiency across the credit complex? (Respondents were asked to select one options)

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"Private credit has become both a significant source of opportunity and a growing area of pricing inefficiency across the broader credit complex. As firms search for diversification and yield in an increasingly volatile environment, attention is shifting toward alternative fixed-income products that can enhance portfolio resilience while introducing greater complexity around liquidity, transparency, valuation consistency, and risk management.

2026 is highlighting an industry-wide focus on balancing attractive returns with stronger scrutiny around underwriting quality, pricing visibility, and the evolving role of private credit within modern fixed income portfolios."

Flora Pleguezuelos, Conference Director, Fixed Income Leaders Summit

"Market participants continue to prioritise trade data and dealer quotes, but the challenge lies in synthesising fragmented signals into stable valuations. Independent evaluated pricing, including S&P Global Bond Pricing, plays a key role in translating these inputs into consistent outputs that can be applied reliably across increasingly systematic investment workflows."

Nathan Kirk, Managing Director - Pricing, Valuations & Reference Data, S&P Global Market Intelligence

The message is clear. While some operational variability is recognised as inevitable, tolerance for failure during launch remains extremely low.

This is where the industry’s vulnerabilities become most visible. Pharmaceutical supply chains operate in an environment of increasing volatility, yet during their most critical moments — new product launches — the margin for error approaches zero.

Designing networks that can meet that standard, without escalating cost indefinitely, represents one of the sector’s central strategic challenges.