Fixed income
Plus Fixed Income Team
The team delivers dynamic portfolios for clients by combining global fixed income sector expertise with a nimble approach to help drive enhanced outcomes.
A consistent approach for thriving in inconsistent fixed income markets
Plus Fixed Income team: a six-month outlook, with multiple levers and an unbiased approach
Transcript
Janet Rilling: We think that there are three key differentiators to our process. The first is a six-month outlook. We look ahead a couple quarters, 2 to 3 quarters, rather than taking a much longer 3-to-5 year outlook. We do this because we think it's easier to find inflection points. In addition, it's a bit easier to see where markets are going when you look out around the corner rather than trying to predict a whole cycle. I think it also allows us to be more nimble and we're ready to make changes in the portfolio, which is valuable considering how often markets move in unpredictable ways. The second key differentiator is our use of multiple levers. We employ both an approach of investing in the core sectors and also the plus sectors across a range of strategies by calibrating the amount of core and plus, depending on the investment objective. But within each parts of the portfolio, there are additional levers. In the core part of the portfolio, we can move around our duration and curve positioning, our sector weights, which includes treasuries, investment grade credit, and structured product. And then in the plus part of the portfolio, we cast a wider net. We look at all the global fixed income sectors. Those range from U.S. high yield to European investment grade and high yield, emerging markets, foreign currency, and global government bonds. And then our last differentiator is an unbiased approach. We don't want to be anchored or have structural biases built in the portfolio. Rather, we want to move to where we see value in the market and not stay stuck in one particular position. That unbiased approach is implemented in a way to achieve more diversified sources of alpha and a steadier return stream.
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.
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