Customized solutions

Each fixed income portfolio is customized to meet your particular risk constraints or duration requirements.

Our philosophy in managing core fixed income accounts is to add value above a benchmark index utilizing U.S. government and agency securities corporate bonds, foreign government and agency bonds, mortgage-backed securities (MBS), and asset-backed securities (ABS), within a narrow duration band relative to the benchmark index. This strategy is most appropriate if you seek a core bond allocation and have tighter guideline constraints.

Through yield curve and yield spread strategies, we identify attractive sector and issue opportunities. In addition, we seek relative value opportunities across various structures within these sectors, such as through the use of Floating Rate Notes and Treasury Inflation-Protected Securities (TIPS). We believe this approach minimizes market timing and emphasizes attractive sector and issue spread opportunities within our defined universe of fixed income securities.

Our philosophy in managing core plus fixed income accounts is to add value above a benchmark index within a narrow duration band. We seek to achieve this by emphasizing relative opportunities within the various subsectors, including:

• Corporate bonds
• Foreign government and agency bonds
• Mortgage-backed securities (MBS)
• Asset-backed securities (ABS)
• U.S. governments and agencies

We also utilize opportunities outside the benchmark, such as high yield, private placements, Treasury Inflation-Protected Securities (TIPS) and Floating Rate Notes when appropriate.

By taking advantage of a wider opportunity set of sectors, which have historically achieved above-average returns, this approach enhances our traditional core fixed income strategy. It's a strategy that offers greater flexibility with fewer constraints than our Core strategy, while seeking additional alpha growth and total risk management.

Our philosophy in managing your credit account is to add value above our benchmark index by following a strict relative value discipline. This includes emphasizing debt securities valued too cheaply relative to the issuer's fundamental creditworthiness. Our yield curve positioning is expected to add further value by focusing on the most attractive portions of the yield curve. Your portfolio is constructed within a narrow duration band relative to its benchmark index. This approach minimizes market timing and emphasizes attractive sector and issue spread opportunities within the credit universe.

Consequently, we believe our philosophy will deliver superior risk-adjusted performance, delivering total return in excess of the benchmark while taking less overall risk. This makes the strategy more appealing if you seek additional yield/spread opportunities in excess of prevailing rates for government securities as part of a strategic or tactical allocation within your overall fixed income mandate.

Intermediate Core Fixed Income Strategy

Our philosophy in managing intermediate core fixed income accounts is to add value above a benchmark index utilizing U.S. governments/agencies, corporate credit issues, foreign government and agency bonds, mortgage-backed securities (MBS), and asset-backed securities (ABS) within a narrow duration band to the benchmark index.

Through yield curve and yield spread strategies, we identify attractive sector and issue opportunities. In addition, we seek relative value opportunities across various structures within these sectors, such as Floating Rate Notes (FRNs) and Treasury Inflation-Protected Securities (TIPS).

This strategy is similar to our core account philosophy but is most appropriate if you seek broad fixed income exposure but want to mitigate interest rate risk.

Intermediate Credit Fixed Income Strategy

Our philosophy in managing your intermediate credit fixed income account is to capture the historic performance advantage of corporate credit issues and to add value above our benchmark index within a narrow duration band. This approach minimizes market timing and emphasizes attractive sector and issue spread opportunities within the credit universe. Consequently, we believe this approach will capture the historic sector outperformance that credit has enjoyed over mortgages and government and agency issues.

This strategy is similar to our credit account philosophy but is most appropriate if you seek to mitigate interest rate risk.

Our Emerging Markets strategy applies our relative value discipline to debt issued by emerging market sovereign, quasi-sovereign and corporate entities. Our approach combines top-down and bottom-up analysis using proprietary quantitative tools and internally generated fundamental analysis. Portfolios emphasize regions, countries, issuers, and securities valued too cheaply relative to fundamental creditworthiness. We seek to be opportunistic in local currencies when the risk/return profile is viewed more attractively versus U.S. dollar alternatives.

We believe our Emerging Markets investment philosophy will deliver superior risk-adjusted performance, delivering total return in excess of the benchmark while taking less overall risk. This strategy is attractive if you are seeking the additional yield and diversification benefits of emerging markets securities within your overall fixed income mandate.

Long Duration Credit Fixed Income Strategy

Our approach to managing long duration credit fixed income accounts is to provide customized solutions that help you manage your employee-retirement plan's longer-term liabilities and/or specific funding goals. The strategy seeks to add value above a benchmark within a narrow duration band to a given index. This strategic commitment to longer-duration assets may be complemented by an overlay strategy that offsets the interest rate risk of dynamically targeted liabilities.

We emphasize credit in longer-duration strategies because they offer a better match to the profile of many plan sponsors' stream of liabilities. This allows you to minimize the volatility of your funding levels. The approach also allows us to utilize fixed income securities with higher liquidity, lower risk, and a lower correlation with alternative asset classes. Our long-duration approach is flexible, enabling us to capture sources of added value – including sector and quality selection – while leveraging our core competencies in credit research and trading.

Liability-Driven Investing

We believe a successful liability-driven investing solution incorporates a collaborative and ongoing partnership with you.

With nearly two decades of experience in this area, we develop a customized investment program to manage the inherent risks of your institution's liabilities, while maintaining the flexibility to adapt to changes in liability streams and market environment.