Senior Director Amit Singh Shares Lessons from Running Fixed Income Strategies

Credit markets expose the difference between genuine expertise and favorable conditions. Bond portfolio managers can appear competent when markets remain stable and clients accept predictable returns. Market disruptions eliminate this protection, revealing which managers understand credit fundamentals and which depend entirely on benign environments.

Amit Singh manages fixed income strategies at Carret Private Capital in Hong Kong, where his approach targets volatility rather than stability. His fixed income strategy, launched in December 2022, has delivered approximately 8% annual returns by capitalizing on market dislocations rather than avoiding them.

The Credit Suisse collapse in March 2023 demonstrated this philosophy. Swiss authorities eliminated $17 billion of the bank's Additional Tier 1 bonds, creating panic across European banking AT1 markets as investors questioned similar instruments from other institutions.

"Every other bank, like HSBC, Deutsche, UBS, BNP—you name it—their AT1 bonds went down by 30 to 40%," Singh said. "Obviously, people got worried, and they were just panic selling. That was a good time for us to do some shopping."

Singh's team purchased high-quality AT1 bonds from financially sound banks at discounted prices while other investors sold indiscriminately. Bond prices recovered once market panic subsided, generating outsized returns for disciplined buyers.

Expertise Development Through Rate Cycles

Singh's fixed income specialization spans 15 years, navigating interest rate environments from zero percent through recent levels above 5%. This experience provides a perspective unavailable to managers who began careers after the 2008 financial crisis.

"I've seen zero rates. I've seen the difficulty in achieving a 3% return on relatively safer bonds, and now you can get 6 to 7% on the same bond," he explained. The Federal Reserve's tightening cycle from 2022 through 2024 created opportunities for managers who understood duration mathematics and credit quality differences.

His strategy concentrates on investment-grade corporate bonds denominated in U.S. dollars, eliminating currency risk while targeting credits with strong balance sheets. Portfolio duration averages four to five years, balancing income generation against interest rate sensitivity.

"The mandate is pretty simple—plain vanilla, focusing on investment-grade credits, U.S. dollar as a currency, no [currency] risk," Singh said. "Pretty vanilla fixed income strategy."

Results contradict this modest description. Singh's strategy consistently outperformed relevant benchmarks by identifying value opportunities when other managers reduced risk exposure.

Active Positioning Through Volatility

Passive benchmark fails to protect capital or capture opportunities when markets experience stress. Singh's methodology involves increasing exposure precisely when other managers retreat.

"When interest rates, you know, inflation print comes higher, the market tends to react in a way where the 10-year yields sort of shoot up, which basically means bond prices are falling down," he said. "That's when we add more exposure to take advantage of this volatility."

This contrarian approach requires both conviction and technical analysis. Bond prices move inversely to interest rates, creating temporary pricing inefficiencies when economic data surprises markets. Skilled managers exploit these movements by distinguishing genuine value from temporary panic.

The Credit Suisse episode exemplified these dynamics. AT1 bonds from Deutsche Bank, HSBC, and other European institutions declined dramatically despite these banks maintaining stronger financial positions than the failed Swiss institution. Market participants sold first and analyzed credit quality later.

Singh's approach involved fundamental credit analysis during the selloff, purchasing bonds from institutions with solid capital ratios and stable business models. "We bought some good bonds and we managed to get some really outsized returns because of that call," he said.

Client Education and Behavioral Challenges

Fixed-income clients frequently misunderstand the inverse relationship between interest rates and bond prices, creating behavioral complications when markets experience volatility. Singh dedicates considerable time to educating clients about duration risk and credit analysis fundamentals.

"When interest rates went from zero to five [percent], you are like, 'Okay, I can earn 5% on my fixed deposit. Why is my portfolio down 20%? Singh described typical client reactions when the Federal Reserve raised rates aggressively.

The explanation involves duration mathematics and opportunity cost analysis. Existing bonds issued at lower rates decline in price when new bonds offer higher yields. These paper losses reverse as bonds approach maturity or rates eventually decline.

"It's not like the company was wrong or the strategy was wrong. It's just the cycle of time," Singh explained to clients experiencing temporary portfolio declines throughout 2022's interest rate surge.

Client communication becomes essential when portfolio values decline temporarily. Trust erodes quickly even when losses reflect technical factors rather than credit deterioration. Singh emphasizes maintaining strategic discipline rather than making reactive changes.

"It's our job to keep reminding them from time to time, like, 'This is how it works,'" he said. Behavioral coaching often determines client outcomes more than security selection.

Risk Management Through Security Selection

Singh's portfolio construction balances income generation against downside protection through careful issuer analysis and position sizing. The strategy avoids concentration in single sectors or credits while maintaining adequate conviction in individual positions.

"Focus is more on getting more rights than wrongs," he said. "I would be much happier if I got it right 55% of the time. I'm happy."

This methodology emphasizes consistent performance rather than concentrated bets seeking outsized gains. Position sizes reflect conviction levels while ensuring individual security losses cannot impair overall portfolio performance.

Geographic diversification remains limited given the U.S. dollar focus, but sector allocation varies based on credit cycle positioning. Financial sector exposure increased when regional banking stress in early 2023 caused high-quality bank bonds to trade at attractive spreads.

The strategy excludes emerging market debt and high-yield securities, maintaining investment-grade credit standards throughout market cycles. This discipline prevented participation in credit booms and avoided losses when subsequent busts occurred.

Macro Analysis and Positioning Decisions

Fixed income management requires macroeconomic analysis to position portfolios for changing interest rate environments. Singh's background provides expertise in reading Federal Reserve policy signals and economic data trends.

"Once you understand macro, it's not difficult to understand equities as well," he said. Interest rates affect all asset classes, making fixed income managers natural students of broader economic cycles.

Current positioning reflects expectations for eventual Federal Reserve rate cuts as inflation pressures moderate. However, Singh avoids dramatic duration bets based on timing predictions, preferring moderate sensitivity while focusing on credit selection.

"Ten-year US Treasury is the underlying benchmark for any fixed income instrument," he explained. Understanding sovereign yield movements provides the foundation for corporate bond relative value analysis.

Singh's competitive sailing background provides perspective on navigating changing conditions without abandoning long-term objectives. "When you can't really change the wind, you just adjust your sails," he said.

This philosophy applies directly to fixed income management. Economic cycles and Federal Reserve policy create prevailing conditions that bond managers must navigate. Success comes through tactical adjustments rather than attempting to predict major directional changes.

Singh's track record demonstrates how technical expertise, disciplined risk management, and behavioral coaching combine to generate superior outcomes in fixed income investing. His strategy's consistent outperformance reflects the value active management provides when passive approaches fail to adapt to changing market conditions.