Investment Process
We believe that superior fixed-income performance may be achieved by focusing on three key drivers of excess returns: sector rotation, security selection, and yield-curve positioning, while diversifying with respect to risk exposure.

Our fixed-income management team members focus on macroeconomic fundamentals and work collaboratively to structure portfolios based on:

Security selection: Our comprehensive credit research and rigorous cash flow analysis are designed to identify mispriced securities. Security-specific risk is managed by diversifying across industries and issuers. Trading costs are minimized by leveraging our size as an asset manager to achieve competitive execution.

Sector rotation: We use a factor model-driven approach to assess relative value across fixed-income sectors. Sectors are overweighted or underweighted based upon the expected returns and risk estimates for each sector balanced against the portfolio’s tolerance for risk.

Yield-curve positioning: We actively manage yield-curve exposure, making modest adjustments to portfolio duration (maximum ±10% vs. the benchmark) based on our research on long-term interest-rate trends and in response to technical dislocations in interest-rate markets.

Research
Fundamental credit research, extensive quantitative risk modeling, and rigorous sector analysis are key components of the fixed-income strategy.

Proprietary sector factor model analysis

Proprietary credit research

Proprietary mortgage security research

Proprietary government security analysis

“Street” research

State-of-the-art analytical systems