Strategy

US Core Plus Bond

The US Core Plus Bond Composite seeks current income and capital appreciation primarily through investment in sectors and securities within the Bloomberg Barclays U.S. Aggregate Bond Index. The strategy may also invest in high yield, emerging markets, and non-dollar bonds (hedged and unhedged).

3YR Return Annualised (Net)
(View Total Returns)

Tracking Error
(5 Years)

5.17%
2.65%

1YR Return (Net)
(View Total Returns)

Information Ratio
(5 Years)

6.22%
0.28

Inception Date 31-Dec-2004

Performance figures calculated in USD

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Brian Brennan
Brian Brennan, Portfolio Manager

Brian Brennan is a portfolio manager in the Fixed Income Division at T. Rowe Price. Mr. Brennan has lead portfolio management responsibilities for the US Treasury, US Core Plus Bond, and Stable Value Strategies. He also is a member of the portfolio strategy team for T. Rowe Price's core and core plus mandates. Mr. Brennan is a vice president of T. Rowe Price Group, Inc., T. Rowe Price Associates, Inc., T. Rowe Price International Ltd, and T. Rowe Price Trust Company.

 

Strategy

Investment Approach

  • Focuses primarily on investment-grade, U.S. fixed income securities, with the ability to integrate non-index sectors and securities for additional diversification and yield.
  • Integrates proprietary credit and capital market research to identify market inefficiencies and relative value opportunities.
  • Adds value primarily through sector allocation and individual security selection. Can also adjust duration and term structure positioning to enhance return potential and defend against rising rates.
  • Employs a risk-aware approach, with risk exposures based on conviction levels and available opportunities.
  • Exploits market inefficiencies through opportunistic trading conducted by specialist teams.

Portfolio Construction

  • Duration is managed within +/- 20% of benchmark
  • Sector exposure will typically range +/-25% relative to the benchmark
  • Non-index exposure: 0% to 20% high yield, 0% to 20% non-dollar (hedged and unhedged), 0% to 10% below investment grade emerging markets
  • Average credit quality of the portfolio is A- or better
  • Tracking error should range between 1.0% and 2.0% in most market environments

Holdings

Issuers

Top
Issuers
10
Top 10 Issuers 7.23% Was (30-Jun-2020) 9.42%
Other View Top 10 Issuers

Monthly data as of 30-Sep-2020

Holdings

Total
Holdings
1053
Largest Holding TRP Institutional High Yield - Inst 4.56% Was (30-Jun-2020) 4.06%
Top 10 Holdings 14.31%
Other View Full Holdings Quarterly data as of 30-Sep-2020

Quality Rating View quality analysis

  Largest Overweight Largest Underweight
Quality Rating BBB US Treasury
By % 10.55% -30.10%
Portfolio 24.64% 7.31%
Benchmark 14.09% 37.40%

Average Credit Quality

A

Monthly Data as of 30-Sep-2020
Benchmark:  Bloomberg Barclays U.S. Aggregate Bond Index

Sources: Moody's Investors Service; if Moody's does not rate a security, then Standard & Poor's (S&P) is used as a secondary source. When available, T. Rowe Price will use Fitch for securities that are not rated by Moody's or S&P. T. Rowe Price does not evaluate these ratings, but simply assigns them to the appropriate credit quality category as determined by the rating agency. 

U.S. government agency securities are issued or guaranteed by a U.S. government agency and may include conventional pass-through securities and collateralized mortgage obligations. Unlike Treasuries, government agency securities are not issued directly by the U.S. government and are generally unrated but may have credit support from the U.S. Treasury (e.g., FHLMC and FNMA issues) or a direct government guarantee (e.g., GNMA issues). Therefore, this category may include rated and unrated securities. 

U.S. Treasury securities are issued by the U.S. Treasury and are backed by the full faith and credit of the U.S. government. The ratings of U.S. Treasury securities are derived from the ratings on the U.S. government. 

Maturity View maturity analysis

  Largest Overweight Largest Underweight
Maturity 0-1 Years 3-5 Years
By % 14.81% -12.14%
Portfolio 14.81% 22.55%
Benchmark 0.00% 34.69%

Weighted Average Maturity

7.08 Years

Monthly Data as of 30-Sep-2020
Benchmark:  Bloomberg Barclays U.S. Aggregate Bond Index

Duration View duration analysis

  Largest Overweight Largest Underweight
Duration 3-5 Years 1-3 Years
By % 12.96% -13.05%
Portfolio 36.03% 20.51%
Benchmark 23.07% 33.57%

Weighted Average Duration

6.11 Years

Monthly Data as of 30-Sep-2020
Benchmark:  Bloomberg Barclays U.S. Aggregate Bond Index

Sectors

Total
Sectors
11
Largest Sector Mortgage 29.97% Was (30-Jun-2020) 30.13%
Other View complete Sector Diversification

Monthly Data as of 30-Sep-2020

Benchmark: Bloomberg Barclays U.S. Aggregate Bond Index

Largest Overweight

High Yield
By9.97%
Portfolio 10.47%
Benchmark 0.51%

Largest Underweight

U.S. Treasury
By-30.44%
Portfolio 7.31%
Benchmark 37.74%

Monthly Data as of 30-Sep-2020

Team (As of 01-Oct-2020)

Brian Brennan

Brian Brennan is a portfolio manager in the Fixed Income Division at T. Rowe Price. Mr. Brennan has lead portfolio management responsibilities for the US Treasury, US Core Plus Bond, and Stable Value Strategies. He also is a member of the portfolio strategy team for T. Rowe Price's core and core plus mandates. Mr. Brennan is a vice president of T. Rowe Price Group, Inc., T. Rowe Price Associates, Inc., T. Rowe Price International Ltd, and T. Rowe Price Trust Company.

Mr. Brennan has 33 years of investment experience, 19 of which have been at T. Rowe Price. Prior to joining T. Rowe Price in 2000, he was a fixed income manager with Howard Hughes Medical Institute, responsible for Treasury, emerging, nondollar, and derivative strategies for core plus. Mr. Brennan began his career at CIGNA Investments, Inc., as a portfolio analyst for immunized and indexed fixed income accounts.

Mr. Brennan earned a B.S. in economics and computer sciences and an M.A. in economics from Trinity College in Hartford, Connecticut. He also earned the Chartered Financial Analyst (CFA) designation and is a former president and treasurer of the Baltimore CFA Society.

  • Portfolio manager
    since
    2004
  • Years at
    T. Rowe Price
    20
  • Years investment
    experience
    34
Andrew McCormick

Andy McCormick is the head of the Fixed Income Division. He oversees fixed income investment management. Andy also is the head of U.S. Taxable Bonds. He is president of the High Yield Fund and Multi-Sector Account Portfolios; chairman of the Fixed Income Steering Committee; and a member of the firm's Management, Investment Management Steering, and Product Strategy Committees. He also is a vice president of T. Rowe Price Group, Inc., T. Rowe Price Associates, Inc., and T. Rowe Price Trust Company.

Andy’s investment experience began in 1983, and he has been with T. Rowe Price since 2008, beginning as a portfolio manager in the Fixed Income Division. After that, he served as head of Securitized Products and as lead portfolio manager for the US GNMA Bond Strategy and co-portfolio manager for the Total Return Bond Strategy before being appointed to his current role in 2019. Prior to T. Rowe Price, Andy spent 13 years on Wall Street trading mortgages and agency securities, 10 years at Fannie Mae managing significant mortgage assets, and two years working with a hedge fund manager and mortgage real estate investment trust firm.

Andy earned a B.S. in finance from Syracuse University.

  • Portfolio manager
    since
    2010
  • Years at
    T. Rowe Price
    12
  • Years investment
    experience
    37
Robert M.  Larkins, CFA

Robert Larkins is a portfolio manager in the Fixed Income Division at T. Rowe Price. Mr. Larkins is lead portfolio manager of the firm's suite of bond index strategies, overseeing the U.S. Aggregate Bond Index Strategy, the U.S. Enhanced Aggregate Bond Strategy, and numerous custom bond index mandates, including liability-driven investment portfolios tailored to meet specific client needs. He is also lead portfolio manager of the Long Duration Credit Strategy and is a member of the firm's Investments Derivatives Committee. Mr. Larkins is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Associates, Inc.

Mr. Larkins has 16 years of investment experience, all of which have been with T. Rowe Price. Prior to joining the firm in 2003, he worked for Dow Chemical Company for four years as a research engineer.

Mr. Larkins earned a B.S. in chemical engineering from Brigham Young University and an M.B.A. in finance from The Wharton School, University of Pennsylvania. He also has earned the Chartered Financial Analyst designation.

  • Portfolio manager
    since
    2014
  • Years at
    T. Rowe Price
    17
  • Years investment
    experience
    17
Stephen L. Bartolini, CFA

Steve Bartolini is a portfolio manager in the Fixed Income Division at T. Rowe Price. Mr. Bartolini is the lead portfolio manager of the U.S. Core Bond Strategy, the U.S. Inflation Protected Strategy, and the U.S. Short-Term Inflation Focused Bond Strategy. He also co-heads the firm's global interest rate and currency strategy team and is a member of the portfolio strategy team for U.S. taxable bond strategies. Mr. Bartolini is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Associates, Inc.

Mr. Bartolini has 20 years of investment experience, nine of which have been with T. Rowe Price. Prior to his current role, he was a Baltimore-based mortgage trader in Global Trading for three years. Before joining T. Rowe Price in 2010, Mr. Bartolini spent nine years at Fannie Mae in the capital markets area, where he served as a director of portfolio management, a senior trader, and an analyst.

Mr. Bartolini earned a B.S. in economics from George Washington University and an M.B.A. in finance from the University of Maryland, Robert H. Smith School of Business. He also has earned the Chartered Financial Analyst designation.

  • Portfolio manager
    since
    2016
  • Years at
    T. Rowe Price
    10
  • Years investment
    experience
    21
Christopher Brown, Jr., CFA

Chris Brown is a portfolio manager in the Fixed Income Division at T. Rowe Price. Mr. Brown is the head of the Securitized Products team, portfolio manager of the Total Return Strategy, and a member of the portfolio strategy team for U.S. taxable bond strategies. He is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Associates, Inc.

Mr. Brown has 19 years of investment experience, 14 of which have been with T. Rowe Price. Before assuming his current role, Mr. Brown was an associate portfolio manager on the U.S. Taxable Bond team and a portfolio investment strategist on the Fixed Income Quantitative team. Prior to joining T. Rowe Price in 2005, he was a fixed income analyst and trader at Riggs Investment Advisors, Inc., in Washington, D.C. Before this, he was an investment analyst for Cambridge Associates LLC in Arlington, Virginia.

Mr. Brown earned a B.A. in economics from Washington & Lee University and an M.B.A. from the University of Maryland, Robert H. Smith School of Business. He also has earned the Chartered Financial Analyst designation.

  • Portfolio manager
    since
    2016
  • Years at
    T. Rowe Price
    15
  • Years investment
    experience
    20
Jeffrey S.  DeVack, CFA

Jeff DeVack is a portfolio specialist in the Fixed Income Division. He is a member of the U.S. Taxable Bond team covering multiple strategies, working closely with clients, consultants, and prospects. Jeff is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Associates, Inc.

Jeff’s investment experience began in 2000, and he has been with T. Rowe Price since 2011, beginning as a senior portfolio analyst in the Fixed Income Investment Specialists department. After that, he became a portfolio specialist.  Prior to T. Rowe Price, Jeff was a partner in an investment consulting group at UBS Financial Services, where he worked with both institutional clientele and high-net-worth families. Jeff was also employed by J.P. Morgan Chase & Co., where he started his career working primarily as an investment banking analyst in a group that structured asset-backed securities transactions for Fortune 500 companies.

Jeff earned a B.B.A., magna cum laude, in finance and economics from Loyola University Maryland, Sellinger School of Business and is a member of Beta Gamma Sigma. He also has earned the Chartered Financial Analyst designation.

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

  • Years at
    T. Rowe Price
    9
  • Years investment
    experience
    20

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GIPS® Information

T. Rowe Price ("TRP") claims compliance with the Global Investment Performance Standards (GIPS®). TRP has been independently verified for the twenty one- year period ended June 30, 2017 by KPMG LLP. The verification report is available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm's policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation.

TRP is a U.S. investment management firm with various investment advisers registered with the U.S. Securities and Exchange Commission, the U.K. Financial Conduct Authority, and other regulatory bodies in various countries and holds itself out as such to potential clients for GIPS purposes. TRP further defines itself under GIPS as a discretionary investment manager providing services primarily to institutional clients with regard to various mandates, which include U.S, international, and global strategies but excluding the services of the Private Asset Management group.

A complete list and description of all of the Firm's composites and/or a presentation that adheres to the GIPS® standards are available upon request. Additional information regarding the firm's policies and procedures for calculating and reporting performance results is available upon request

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