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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Q2 review and Q3 outlook

Janet Rilling, Senior Portfolio Manager and Head of the Plus Fixed Income team, gives an overview of fixed income markets in Q2 and insight into the team’s outlook and positioning going into Q3.

Transcript

Hannah Rosencrantz: Well, Janet, the second quarter had no shortage of news for investors to really contend with. So, what was your biggest takeaway from the quarter?

Janet Rilling: I think it was really the ability of the market to take all of those consistent drumbeat of headlines really in stride. Volatility certainly spiked, particularly on the April tariff announcement. Then, we had a quick reversion where the equity markets rebounded and credit spreads fully retraced everything by the end of May. And then, the markets largely brushed aside the rising geopolitical tensions in the Middle East. For the quarter, equities rallied and credit spreads tightened. And where we sit at the end of the first half of 2025 is total positive returns across risk markets. That really underscores investors’ ability to face down uncertainty.

Hannah: Got it. So, markets really showing some resilience in the second quarter. What should investors keep in mind as we enter Q3?

Janet: So, the good news is fixed income markets are offering a cyclically high level of yield, but at the same point in time, the credit risk compensation is generally low. So, I think it's important for investors to be mindful to not overpay for taking on credit risk or not taking an indiscriminate approach to bond investing. Rather, the name of the game is to capture the ample yield that's available by using an approach that emphasizes flexibility and diversification.

Hannah: So, where are you finding pockets of value today and how are you positioning portfolios beyond that to really set them up for success in Q3 and beyond?

Janet: So, a favored portion of the market for us is the securitized space. There's a number of subsectors there, and one of our favored areas is agency mortgage-backed securities. There, we like the technicals, as well as the yield advantage compared to some of the other fixed income sectors. Another exposure we're emphasizing is a modest overweight to duration. We think that presents a good downside hedge. And then, lastly, we're positioning for flexibility. So, we do implement a rolling six-month outlook that helps us identify mispriced securities. And it puts us in a position to be ready for some of the unexpected things that could occur in the third quarter.

Composite performance

Average annual returns

Average annual returns

(as of 3/31/2025)
1/1/1989
1M
3M
YTD
1Y
3Y
5Y
10Y
Inception
Composite (Gross)
0.40
1.42
1.42
6.31
5.14
4.11
2.91
4.47
Composite (Net)
0.38
1.37
1.37
6.10
4.93
3.90
2.67
4.00
Benchmark
0.38
1.12
1.12
5.24
4.18
2.56
2.02
3.53

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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