Top-Down, Macro Approach
Analyze macroeconomic conditions to correctly identify duration and spread sector allocations through the market cycle.
The strategy adds value through active U.S. Treasury duration management and opportunistic shifts to corporate credit. It also is a compelling alternative to traditional core plus approaches that overutilize credit and underutilize duration management which may lead to outcomes that are suboptimal from an asset allocation utility standpoint.
Top-Down, Macro Approach
Analyze macroeconomic conditions to correctly identify duration and spread sector allocations through the market cycle.
Active U.S. Treasury Duration Management
Treasury allocations are determined by valuation relative to the business cycle, as well as consumer, business, and credit conditions.
Opportunistic Shifts to Corporate Credit
Trigger-based allocations to investment-grade corporate credit only in response to significant spread-widening events.
High, Differentiated, and Defensive Alpha
Low correlation to spread markets and low to negative correlation to equities typically allows the strategy to exhibit positive returns and outperform both the benchmark and peer group during major equity drawdown events.
This value-based strategy is guided by the broad investment themes of our Global Fixed Income team with the goal of maximizing total return while meeting our primary objective of capital preservation. To avoid the inefficiencies of multi-sector U.S. bond benchmarks, the team takes a benchmark-agnostic approach that limits investment to only the few sectors and issues considered most attractive.
The U.S. Fixed Income strategy employs two levers to ultimately construct and manage the portfolio. Our first lever, sector allocation, is driven by our aforementioned global macro themes. When we encounter a fixed income sector, such as U.S. Corporates or Treasuries, or bonds with superior risk/return profiles and when conditions are ideal, we will create a significant overweight within our guideline parameters. Our second lever, duration management, involves managing the interest rate exposure of the portfolio based upon the stages of the global business cycle.

This is a general depiction of the investment team's methodology and may not reflect the exact investment process for any particular strategy.

Industry since: 1987

Industry since: 1994

Industry since: 1995

Industry since: 2002
This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. All investments involve risks, including possible loss of principal. There is no guarantee that a strategy will meet its objective. Performance may also be affected by currency fluctuations. Reduced liquidity may have a negative impact on the price of the assets. Currency fluctuations may affect the value of overseas investments. Where a strategy invests in emerging markets, the risks can be greater than in developed markets. Where a strategy invests in derivative instruments, this entails specific risks that may increase the risk profile of the strategy. Where a strategy invests in a specific sector or geographical area, the returns may be more volatile than a more diversified strategy.
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