Hear why the team believes having a global opportunity set allows them to seek the best risk-adjusted returns for clients.
(Nick Maroutsos) What attracted me to funds management really sort of harkens back to many, many years ago when I got an internship at Smith Barney while working with some stockbrokers. It just happened to be during one of the big bull markets, so I obviously became very enamored with stocks, more so from the technical analysis side of things. Then I realized that you can actually do this for a living and I was hooked.
(Daniel Siluk) What attracted me to funds management is quite simply the ability, the opportunity to work with intelligent and motivated people on a daily basis to discuss and debate macroeconomic trends and themes. And then importantly for myself is to utilize my technical and quantitative skills to generate the best risk-adjusted returns we can for our client base.
(Nick Maroutsos) The absolute return income team is structured in a very flat manner. Dan Siluk, Jason England and myself lead the absolute return income efforts when it comes to portfolio implementation and strategy implementation. However, we are supported by a team of individuals located both in Newport Beach, California, as well as Sydney, Australia, that help us coordinate the credit component, the risk management component as well as the interest rate component.
(Daniel Siluk) The absolute return income strategy is seeking to deliver a return above cash, again, doing that through cycles. Whether rates are rising or falling, whether it is a risk-on or risk-off environment, we are looking to consistently produce these positive, stable returns. And we are looking to do that with a very low amount of volatility.
(Nick Maroutsos) So some of the key features of the absolute return income approach is that we are benchmark agnostic. This strategy now has been going on for over ten years, we have been managing it for a very significant amount of time through business cycles. And what we have found is by adopting a benchmark agnostic approach, we can have a very clean slate when we start a portfolio construction process. We don’t need to invest in certain assets, just because they are in a particular benchmark. We are able to cherry pick what we believe to be the best risk adjusted returns for our portfolio. Similarly, we also adopt a very global mindset, which I think is unique to this space. We believe that different economies operate in different economic cycles, so being able to target opportunities in Australia, New Zealand, Canada, that may be different than what is happening in the US or Europe or Japan, really lend itself to the diversification benefits of the strategy.
(Daniel Siluk) What makes absolute return income the strategy unique is the fact that we have this global opportunity set that allows us to scour the globe, leave no stone unturned, seeking the best risk adjusted returns we can find, without any structural biases to sectors, industries or countries.
(Nick Maroutsos) We believe investors should be making allocation to the absolute return income strategy over the long term, because the fed is looking to normalize interest rates, we are an environment where yields are going to be moving higher, albeit very slowly, and we want to be able to produce that income on an ongoing basis. We are no longer able to ride the yield curve down or credit spreads down given the fact that yields are so low. So fixed income investors need to be far more creative in terms of how they are getting the returns. In essence, fixed income is going to have to work much harder for people’s portfolios than it has previously and our portfolio lends itself to being very dynamic, very nimble in the marketplace in terms of targeting returns.
(Daniel Siluk) Our investment style is focused on high grade, high liquid products, low volatility. We are not really looking to swing for the fences and hit homeruns, it is about knocking singles around the park, so we are really looking to just keep it simple. What I like to do away from the office, I am lucky to live in Southern California. So I have got the weather, I have got the beach, I have got mountains, you know, taking the kids to the park and just enjoying the great outdoors.
(Nick Maroutsos) Outside the office, I like to spend time with my family. That really takes up the majority of my time. Outside of that I like to travel as well as I am an avid sportsman, so usually on the weekends you can either find me on the golf course or on the beach with my surfboard.
The opinions and views expressed are as of 5/1/18 and are subject to change without notice. They are for information purposes only and should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation to buy, sell or hold any security, investment strategy or market sector. No forecasts can be guaranteed. Opinions and examples are meant as an illustration of broader themes and are not an indication of trading intent. It is not intended to indicate or imply that any illustration/example mentioned is now or was ever held in any portfolio. Janus Henderson Group plc through its subsidiaries may manage investment products with a financial interest in securities mentioned herein and any comments should not be construed as a reflection on the past or future profitability. There is no guarantee that the information supplied is accurate, complete, or timely, nor are there any warranties with regards to the results obtained from its use. Past performance is no guarantee of future results. Investing involves risk, including the possible loss of principal and fluctuation of value.
There is no assurance the stated objective(s) will be met.
Fixed income securities are subject to interest rate, inflation, credit and default risk. The bond market is volatile. As interest rates rise, bond prices usually fall, and vice versa. The return of principal is not guaranteed, and prices may decline if an issuer fails to make timely payments or its credit strength weakens.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility, lower liquidity and differing financial and information reporting standards, all of which are magnified in emerging markets.
Derivatives can be highly volatile and more sensitive to changes in economic or market conditions than other investments. This could result in losses that exceed the original investment and may be magnified by leverage.
Diversification neither assures a profit nor eliminates the risk of experiencing investment losses.
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