New Goldman Sachs approach to fixed income?

Goldman Sachs Asset Management seems to be growing more bullish on fixed income. It will add to its exposure over the next three to six months, perhaps starting with financial issues, reports Reuters. But the really interesting news is that the bank also seems to be rolling out a new way of assessing and categorizing risk. Rather than grouping bonds according to their credit rating, Goldman Sachs will stratify the universe of bonds into five levels according to how they're priced against their peers. The ones with the largest spreads will be considered the most risky regardless of how they are rated.

This is a sea change for a lot of clients, who may have to reformulate their guidelines. It all makes a lot of sense. "That has helped us identify risky names and react in a timely fashion, as the market is a much better guide. Credit spreads widen immediately on bad news, whereas it might take a while for the ratings agencies to reflect that," an executive tells the service. 

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