PT Asset Management CEO Sean Dranfield talked with Proactive's Stephen Gunnion about the firm's fixed income positioning heading into 2026, highlighting how shifting yield curve dynamics could favour its barbell strategy.
Reflecting on 2025, Dranfield acknowledged that sectors like corporate and agency mortgage-backed securities outperformed due to spread tightening and curve steepening — areas to which PT Asset had minimal exposure. Despite that, he said, “We're actually, quite excited about the go-forward returns on a relative basis this year because the barbell should actually work even better now.”
Dranfield explained the firm’s core approach combines offensive and defensive allocations. Offensively, PT Asset prefers the 15 to 20-year part of both the Treasury and municipal bond curves, where there is a steeper slope and more yield curve roll, boosting return potential. Taxable municipal bonds and the 20-year Treasury are current favourites, with tax-exempt munis recently being added.
On the defensive side, PT Asset favours structured credit at the short end of the curve, particularly investment-grade, where wider spreads offer 5–6% total returns regardless of rate movements.
Dranfield also underlined PT Asset’s long-term framework, built around three-year return “shapes” that help guide expectations across varying rate environments.
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