Strategy
Investment Approach
- The portfolio seeks to provide a high level of income with fluctuations in principal value consistent with those of a traditional low duration portfolio.
- Utilizes a diversified multi-sector approach to seek to provide investors with consistent returns over a market cycle while minimizing volatility.
- Seeks to add value primarily through sector rotation, individual security selection, and term structure positioning.
- Integrate proprietary credit and capital market research to identify market inefficiencies.
- Structurally overweight invesment grade credit sectors as yield has historically played a much larger role than price appreciation in generating excess returns.
- Aims to exploit market inefficiencies through opportunistic trading conducted by specialized teams.
Portfolio Construction
- Average credit quality of the portfolio is typically AA.
- Non-dollar foreign bond exposure is limited to 10% (hedged and unhedged).
- During normal market conditions, duration is typically managed within +/- 20% of the benchmark.
- Target tracking error range: 40 to 80 basis points.
- Investable universe focuses primarily on short-and intermediate-term investment-grade U.S. fixed income securities, with the ability to integrate non-index sectors and securities, including foreign bonds as well as mortgage-backed, commercial mortgage-backed, and asset-backed securities.
Past performance is not a reliable indicator of future performance.