Fixed income

U.S. Ultra Short Plus Strategy

The strategy pursues total return in excess of the Bloomberg Short-Term U.S. Government/Corporate Index. It is mainly focused on Treasuries, agencies, MBS, ABS, and corporate bonds and targets duration close to its benchmark.

Competitive advantages

Investment horizon

The team uses a six-month investment horizon to anticipate market inflection points.

Multiple levers

The team strategically allocates, by objective, to a variety of alpha sources through security selection, sector allocation, and duration and curve positioning.

Unbiased approach

The team seeks diversified and unbiased sources of alpha in an effort to generate compelling returns over a market cycle.

Investment approach

A consistent approach for thriving in inconsistent fixed income markets

Dedicated sector specialists

The team utilizes a specialist model in which each of the portfolio managers offers significant expertise in a given sector of the global fixed income markets. The team is able to source opportunities and navigate risks by leveraging the best ideas of the diverse team.

Primary research

The team believes primary research conducted by dedicated sector specialists in partnership with our substantial global fixed income research team is the optimal approach to uncover a wide range of investment outcomes.

Relative value focus

The team finds that fixed income markets offer alpha opportunities to active managers that effectively employ a relative value framework to sector, issue selection, duration, and yield curve decisions.

Focused on intentional risk

The team employs robust portfolio construction in combination with comprehensive risk control to take intentional risks and to minimize surprises, which leads to consistent alpha generation over a market cycle.

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Q3 review and Q4 outlook

Janet Rilling, Senior Portfolio Manager and Head of the Plus Fixed Income team, gives an overview of fixed income markets in Q3 and insight into the team’s outlook and positioning going into Q4.

Transcript

Hannah: Hi, Janet. Well, let's dive right in by providing viewers with a recap of what we saw in fixed income markets in the third quarter.

Janet: Sure. Well, in the third quarter, we saw interest rates fall and credit spreads narrow—both of which created tailwinds for bond investors and, as a result, if you had duration and credit in your portfolio, you did well in the third quarter along with really any risk assets. That's especially notable given the uncertainty we've been highlighting over the past few quarters has not gone away. The markets have seemingly been able to shrug off shocks, including rising geopolitical tensions, political dysfunction, and even threats to the Federal Reserve's independence. And given all those attention-grabbing headlines, investors could be forgiven for overlooking the fact that 2025 has actually been a very strong year for fixed income so far. For the year-to-date period through the end of September, the Bloomberg U.S. Aggregate Bond Index, for example, has posted the strongest returns since 2020. It does remain an open question, however, if the market's confidence can last.

Hannah: So, that all sounds like good news for bond investors so far in 2025. But, with the good, there must be something to keep an eye on. So, what should investors be looking out for in the fourth quarter?

Janet: Well, we continue to think that credit compensation—or actually lack thereof—is something to be mindful of. In the third quarter, we saw that the U.S. Investment Grade Credit Index spread hit 68 basis points (bps; 100 bps equal 1.00%) over Treasuries. That's a level we have not seen since December 1997. While solid fundamentals and a very strong technical picture are still supportive of credit, there’s clearly little room for continued tightening. So, we think this is not the environment where investors should be reaching to the bottom of the credit barrel, so to speak; rather, they should be looking for risk that they are being compensated for. We think this is the environment that calls for positioning portfolios for resiliency.

Hannah: So, how should investors be thinking about packing their portfolios with resiliency in the current environment?

Janet: We think it's critical that investors take advantage of the attractive all-in yields and substantial yield breakevens that are available today. A yield breakeven is an estimate of how much yields could rise, or credit spreads could widen, before a fixed income investment would see negative total returns for the following year. So, prioritizing sectors that maximize yield breakevens—think things like short double-B rated high yield bonds or securitized credit, just to name a couple—can really help buoy portfolios should we see adverse market events.

Hannah: So, we should try to be yield choosers rather than yield chasers right now.

Janet: Well said, Hannah.

Hannah: Awesome. Well, thank you so much, Janet, for your time and insight today—looking forward to catching up after Q4!

Composite performance

Average annual returns

Average annual returns

(as of 9/30/2025)
1/1/1989
1M
3M
YTD
1Y
3Y
5Y
10Y
Inception
Composite (Gross)
0.39
1.42
4.19
5.45
6.29
3.71
3.16
4.49
Composite (Net)
0.37
1.36
4.04
5.24
6.08
3.50
2.93
4.01
Benchmark
0.40
1.18
3.37
4.50
4.93
2.92
2.23
3.55

Performance is historical and does not guarantee future results. For more information, please refer to the GIPS composite report found in the documents section.


Calendar year

Calendar year

2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
Composite (Gross)
6.60
6.80
-0.25
0.60
3.25
4.39
1.92
1.86
2.08
0.88
Composite (Net)
6.39
6.58
-0.45
0.40
3.03
4.13
1.66
1.60
1.83
0.62
Benchmark
5.31
5.19
0.69
0.10
1.31
2.69
1.99
0.98
0.80
0.26

Performance is historical and does not guarantee future results. For more information, please refer to the GIPS composite report found in the documents section.


Our team
Meet the investment team

The team employs a sector specialist model whereby tenured investment professionals are supported by rigorous credit research to source opportunities across global fixed income markets.

View Team
Christopher

Christopher Kauffman

Portfolio Manager
Janet

Janet Rilling

Head of Plus Fixed Income
Michael

Michael Schueller

Portfolio Manager
Michal

Michal Stanczyk

Portfolio Manager
Noah

Noah Wise

Portfolio Manager

Key risks

Market risk: Security markets are volatile and may decline significantly in response to adverse issuer, regulatory, political, or economic developments with different sectors of the market and different security types reacting differently to such developments.

Debt securities risk: Debt securities are subject to both credit and interest rate risk. Credit risk is the possibility that the issuer or guarantor of a debt security may be unable, or perceived to be unable or unwilling, to pay interest or repay principal when they become due, and credit risk increases as an issuer’s credit quality or financial strength declines. Interest rate risk is the possibility that interest rates will change over time such that when interest rates rise, the value of debt securities tends to fall and the longer the terms of the debt securities held the greater the impact of this risk.

High yield risk: If a strategy invests in high yield securities (commonly known as junk bonds), these securities are considered speculative and have a much greater risk of default or of not returning principal and their values tend to be more volatile than higher-rated securities with similar maturities.

Foreign securities risk: If a strategy invests in the securities of non-U.S. issuers, these investments may be subject to lower liquidity, greater price volatility, and risks related to adverse political, regulatory, market, or economic developments and may be affected by changes in foreign currency exchange rates.

Investors should know that this strategy deployed may be subject to additional investment risks. For important information about the investment manager, please refer to the investment manager’s Form ADV Part 2, which is available upon request.

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