We offer pure play inflation-linked strategies so there is no distraction from other asset classes.

Our US and global inflation-linked bond strategies are managed by our inflation-linked bond experts based in New York and Paris. Both our US and global strategies employ the same investment philosophy and process. They are based on a pure play approach that  offers alpha unique to the asset class.

EUR 15.5 bn

(USD 18.9 bn)

assets under management

15+ year

track record

5

inflation linked portfolio managers

Co-heads of Inflation Linked Bond team working together for

10+ years

Investment philosophy and process

We adopt a pure-play approach to inflation-linked bond management, aiming to generate excess returns solely by exploiting inefficiencies in the inflation-linked bond marketplace.

Our investment process follows a fundamental top-down / bottom-up approach that uses a number of proprietary valuation tools. First our team analyses the inflation-linked bond marketplace to generate trade ideas, looking at macroeconomic fundamentals, the market’s micro structure, and bottom-up valuation models.  Based on this research we develop a number of trading strategies:

  • Directional strategies: based on our expectations of the direction of the inflation-linked bond market
  • Relative value strategies: identifying and capitalising on distortions and mispricing within the inflation-linked bond universe
  • Security selection: taking advantage of differences in risk-adjusted pricing between two or more inflation-linked securities
  • Inflation accruals: varying our exposure to changes in the consumer price index.

We place a strong emphasis on controlling risk.  Risk management is fully integrated within the investment process and monitored on a trade-by-trade basis.

In addition to the strategies listed below, our inflation-linked bond team has a long history of creating customised solutions to meet the objectives of a broad range of clients.

  • US TIPS

    Our US TIPS strategy invests in TIPS and nominal Treasuries, not taking any exposure to credit or mortgage-backed securities. The strategy is actively managed and is typically benchmarked against the Barclays US Inflation-Linked Bond index, although the team manages portfolios against a variety of different benchmarks, including short- and intermediate-duration indices. The strategy had a 18-year track record.

    It is a concentrated portfolio of 20-30 TIPS securities and nominal Treasuries that aims to outperform the benchmark by 50-75 bps over a full market cycle with a tracking error of 110 basis points.

    • A concentrated, pure-play US TIPS strategy – no distraction from other fixed income asset classes
    • Aims to generate excess returns solely by exploiting inefficiencies in the TIPS marketplace
    • Uses a range of macro-driven and technical trading strategies
    • Sophisticated risk management system to monitor risk on a trade-by-trade basis
    • Experienced investment team of inflation-linked bond experts
  • Global inflation linked bonds

    Our global inflation-linked bond strategy invests in inflation-linked bonds and nominal sovereign bonds from around the world, not taking any exposure to credit or mortgage-backed securities. The strategy is actively managed and typically benchmarked against the Barclays World Government Inflation-Linked Bond Index, although the team manages portfolios against a variety of customised benchmarks. The strategy had a 16-year track record.

    It is a well-diversified portfolio of 60-100 global inflation-linked and nominal sovereign bonds. The standard strategy aims to outperform the benchmark by 50-75 bps over a full market cycle with a target tracking error of 110 basis points.

    Our global inflation-linked bond strategy is available with or without a currency overlay.

    • A well-diversified, pure-play global inflation-linked bond strategy – no distraction from other fixed income asset classes
    • Aims to generate excess returns solely by exploiting inefficiencies in the global inflation-linked bond marketplace
    • Uses a range of macro-driven and technical trading strategies
    • Sophisticated risk management system to monitor risk on a trade-by-trade basis
    • Experienced investment team of inflation-linked bond experts