We have over 25 years of experience managing Total Return portfolios drawing from multiple global alpha sources

Our global and US Total Return multi-sector fixed income strategies are managed by teams in New York and London. There are three portfolio managers that oversee portfolio construction, risk budgeting, trade implementation, rebalancing and monitoring and control for our US and global multi-sector product suite. These individuals average over 16 years of experience. The alpha teams that support them have over 35 investment professionals.

EUR 5.7 bn

(USD 6.7 bn)

assets under management

Managing global bonds since

1988

6

alpha sources utilised

4

investment strategies

Investment Philosophy and Process

We believe:

  • systematic use of multiple alpha sources can deliver consistent returns over time;
  • a dedicated alpha source (team) focused on finding value within a sector and relative value among different sectors can provide meaningful value add and downside protection; and
  • individual accountability and alignment of incentives are critical for measuring success and delivering long-term value for clients.

Process

Our process has four steps:

  1. Beta replication
  2. Alpha identification and risk budgeting
  3. Portfolio construction
  4. Monitoring and review

Beta replication begins with identification of the opportunity set, which is defined by client guidelines and/or selection of a benchmark index.  We seek to replicate a portion of the portfolio via efficiently matching the primary risk factors that would drive performance differentials between the portfolio and stated benchmark.  Generally these factors are:  quality, duration, curve, spread and perhaps country or geographic region.  This allows us to control active risk within a stated target and maximum threshold, defined for each strategy. Our Beta replication process involves stratified sampling of the benchmark index such that the major factors are efficiently replicated with far fewer securities than the benchmark offers.

Alpha generation and risk budgeting involves selection of alpha teams to incorporate into the strategy and allocation of risk to alpha teams based on the portfolio manager’s assessment of opportunity. 

Next portfolios are constructed to adhere to the objectives and constraints set forth in the fund or mandate guidelines.  Monitoring and review of our portfolios is done in combination by our portfolio managers, risk and compliance teams.  Our investment risk management team sits with the portfolio managers on the trading desk, but has an independent reporting structure.

 

  • Global Aggregate

    Our global aggregate strategy makes use of multiple alpha sources, including global rates (duration, yield curve, inflation and country spread decisions), currency, structured securities, credit, sector rotation (spread sector relative value) and emerging market debt (local currency, hard currency and corporate).

    The strategy is managed in a diversified manner generally utilizing a combination of physical and derivative securities for trading efficiency.

    Our global aggregate portfolio may be managed relative to a broad market benchmark, such as the Barclays Global Aggregate Index, or to a customized or regional derivation of the global aggregate index. This strategy takes 200-400 basis points (bps) of active risk.

    • Diversified strategy accessing opportunities across the global fixed income universe
    • Disciplined risk budgeting approach
    • Available in global or regional (e.g., US) formats
    • Our global portfolio management experience dates back to 1988
  • Global Unconstrained

    Our global unconstrained strategy seeks to add value over a reference benchmark primarily through sector rotation and security selection.  Managed in a diversified manner it protects liquidity and controls for idiosyncratic (or name specific) risk. 

    This strategy begins with a global aggregate index as the reference benchmark.  Should the portfolio manager have no view on a particular sector or risk factor (e.g., corporates or duration) the starting position would be the reference benchmark.  Benchmark weights are modified through a combination of long-term and short-term views.  Longer-term views are developed annually by our Investment Strategy Group (ISG) and adapted as new information becomes available with the portfolio managers modifying the strategic weights to reflect these views.  Alpha teams are assigned individual risk budgets in line with the strategic views from the portfolio manager.  

    Portfolios may, at times, be structured meaningfully different from the reference benchmark. The portfolio management team may also significantly reduce risk and rotate into high quality cash and government securities to protect downside risk.

     

    • Flexible, unconstrained global fixed income strategy targeting a high level of excess return relative to a global reference index
    • Dual focus on capital preservation and income generation
    • Dynamic asset allocation to capitalise on opportunities as they arise
    • Use of multiple alpha sources ensures diversification of investment themes
    • Long and compelling track record
  • Global Sovereign

    Our global sovereign strategies invest primarily in sovereign bonds.  We offer varying degrees of constrained and unconstrained capabilities allowing for investment in a more narrow, (e.g., largely developed, high quality context) or broad developed and emerging construct.

    Our global sovereign strategies are constructed in a diversified manner typically employing the following alpha teams: Global rates (duration, yield curve, inflation and country spread decisions); and Currency. Portfolio managers will modify the risk budgets assigned to the alpha teams in conjunction with the perceived opportunity set available.  Our global sovereign strategies may utilize input from both our Investment Strategy Group (longer-term thematic views) and Emerging Market Debt (primarily sovereign) teams.

    Our global sovereign unconstrained portfolio has a target tracking error range of 100 to 500 basis points.

    • Diversified strategy designed to access opportunities across the global government bond universe
    • Combined strategic (top-down) views with bottom-up input from specialised alpha teams
    • Disciplined risk budgeting approach
    • Experienced in managing global fixed income portfolios since 1988
  • US Core/Core Plus

    Our US core and US core plus strategies invest in a diverse set of fixed income instruments as defined by the Barclays US Aggregate or similar index.  Both strategies use the following alpha teams: rates, structured securities, credit, and sector rotation.

    In addition, our US core plus strategy utilises alpha opportunities from the emerging markets debt team.  Geographic allocations are constrained to the US for our US core strategy while our US core plus strategy is not limited to the US and may make opportunistic use of both non-US debt, emerging market debt and below investment grade issues.  The US core plus portfolio, however, will maintain an investment grade rating and over time will be largely concentrated in the US fixed income market.

    Typical US core portfolios seek to take 100-200 bps of active risk over a market cycle.  Our core plus strategy has a tracking error target of approximately 200 basis points over a market cycle.

     

    • Diversified investment-grade US aggregate fixed income strategy
    • Opportunistic use of “plus” sectors to provide diversification and return  (US core plus only)
    • Combined strategic (top-down) views with bottom-up input from specialised alpha teams
    • Disciplined risk budgeting approach
    • Experienced in managing US Core strategies for institutional clients for over 25 years