How are fixed income investors responding to market volatility?

Overview

This episode of the Market Dialogues podcast features Joseph Higgins, Head of Multi-Sector Portfolio Management and Portfolio Manager for Global Fixed Income Team at Nuveen, in a conversation with Tim O’Brien, Global COO of Pricing at Bloomberg. 

The discussion explores how rapid technological advances are reshaping the fixed income landscape, from how investors access and act on market data to the growing role of AI and automation in portfolio management. In the context of volatile markets, Higgins shares his perspective on navigating risk, identifying opportunities in the fixed income space, and adapting investment strategies to a changing environment. 

Source: Pricing & Valuations Summit, May 7, 2025, New York

About the series

The Market Dialogues podcast series provides access to curated, thought-provoking discussions from Bloomberg global events. It offers in-depth insights from experts on key trends and themes driving the markets today and beyond. 

Discover more conversations in the Market Dialogues series here. 

In focus 

Featured insights from this episode of Market Dialogues: 

On active portfolio management during periods of volatility 

Joseph Higgins: [During periods of volatility] there are sectors or securities that don’t trade and remain a bit of an unknown…But generally, those periods are periods of opportunity. We traded actively throughout that period [volatility period in April 2025], [guided by] our fundamental views and a lot of quantitative and proprietary overlays.* 

On fixed market opportunities 

JH: In terms of an operating methodology—because, as we’re all aware, a lot of the tariff elements are not resolved…There are some areas that are more dislocated than others—munis would fold into that [investment opportunities] thematic.

We may have, if inflation increases at the margins, a situation where rates stay [higher] a little bit longer than we otherwise would’ve thought. That could make leveraged loans attractive, potentially, given that they’re floating-rate instruments, and you’d get more yield on those for longer… 

The last two that come to mind are the securitized sector, specifically Commercial Mortgage-Backed Securities (CMBS) and Asset-Backed Securities (ABS). While particularly CMBS have rallied enormously, there’s still a lot of moving pieces in terms of the expertise needed to underwrite those securities properly and assess risk in markets that are still changing dramatically on a regional and national basis… 

On use of AI in fixed income markets 

JH: AI is obviously a dynamic and important element of what’s going on in finance. We have an official AI policy at Nuveen. We are certainly of the view that while it’s unlikely in the near term or intermediate term to impact decision making directly, we would not even attempt to use AI to make an investment decision.

But the ability to provide broad efficiencies in the research process that ultimately will free up time for more analysis or for other elements of client service that can truly improve our business. That’s where we see AI providing the most immediate return... 

*Quotations have been edited for brevity and clarity.