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A customizable approach to investing across the entire Investment Grade space, in both corporates and securitized assets.
Our Core Bond strategy is designed to bring together our experience in the various sub-sectors of the fixed income investment grade credit universe and seeks to generate attractive total returns on a risk-adjusted basis. Subject to specific client guidelines, the strategy may invest in a broad universe of investment grade securities, primarily including: Treasuries, Agencies, sovereigns, supranationals, fixed-rate mortgages, adjustable-rate mortgages, investment grade corporate bonds, asset-backed securities, commercial mortgage backed securities, and money market instruments. The strategy seeks to generate alpha from two key sources: security selection within each sub-sector and portfolio level tactical asset allocation. We believe the strategy’s focus on generating less correlated excess returns is a differentiating factor.
Once we determine the sectors and industries that we believe offer attractive investment potential from a fundamental and valuation standpoint, our team of credit analysts perform bottom-up analysis to derive companies for investment. We invest in companies that we believe have experienced management, the ability to generate free cash flow, solid balance sheets, and/or good asset protection. Once these companies are reviewed and vetted, specific securities of an issuer are selected based on covenant analysis, rank in capital structure, leverage at security level, asset coverage of debt, and bond characteristics.
Risk management for our Core Bond strategy involves an ongoing review of both portfolio strategy and individual holdings. As a result of the comprehensive proprietary tools developed by our internal team, the investment team is able to monitor relative exposure to changes in factors such as interest rate levels, yield curve shape, credit spreads, prepayment rates and exchange rates. We also project future portfolio risk by comparing multiple risk environments, segmenting risk components by sector, and examining the overall complexion of risk in the portfolio.
Our disciplined investment process emphasizes credit quality, technicals, valuations, and risk management. We believe rigorous fundamental credit analysis is the key driver of both downside protection and alpha generation. We seek to:
- Add value by combining a fundamentally-based approach to country selection with a quantitatively-orientated sector and security selection process
- Add value through tactical allocation to non-benchmark sectors
- Non-Agency securities such as, ABS, CMBS, RMBS
- Agency securities such as, CMBS, RMBS
- Investment grade corporate debt
Strategy Inception Date
- July 2008 as a standalone track record but investing in investment grade securities as part of mandates since 1993