Global Fixed Income Compass
Quarterly insight from our fixed income teams to help clients navigate the markets and opportunities ahead.
INVESTMENT STRATEGIES
Short Duration
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Overview
We believe a bottom-up, fundamentally driven investment process can generate risk-adjusted outperformance and capital preservation over time. Our comprehensive bottom-up view drives decision-making at a macro level, enabling us to make informed risk and sector allocation decisions.
Investment Approach
- The portfolio emphasizes risk-adjusted returns and capital preservation while seeking to identify the best opportunities across fixed income sectors using a bottom-up, fundamentally driven investment process.
- Partnership and fluid communication between fixed income and equity analysts promote idea generation. Credit research emphasizes free cash flow generation, quality of management and security valuation.
- Our proprietary fixed income portfolio and risk-management system, Quantum Global, is integrated into the investment process at each step. We identify and measure the sources of risk in the portfolio at multiple levels to confirm that the portfolio is positioned as intended.
Dynamic Core Short-Duration Bond Holding
Integrated Research
Sophisticated Risk Management
Working to be Consistently Good… Not Occasionally Great
SHORT DURATION BOND COMPOSITE OUTPERFORMED THE BLOOMBERG BARCLAYS 1-3 YEAR U.S. GOV’T/CREDIT INDEX 120 OF 120 PERIODS, OR 100% OF THE TIME
ANNUALIZED MONTHLY ROLLING THREE-YEAR RETURNS *
* Returns based on a 10-year time frame ending 6/3019.
Portfolio Management
Featured Insights
Thoughts and Bonds: The Beginning of the End
Our Fundamental Fixed Income team provides insights on potential investment risks and opportunities, and shares our global outlook for the quarter ahead.
Performance
RETURNS
| Inception: Jan 01, 1993 | 3M | YTD | 1YR | 3YR | 5YR | 10YR | Since Inception |
|---|---|---|---|---|---|---|---|
| Composite Gross | 1.02% | 4.24% | 4.71% | 2.46% | 2.12% | 2.55% | 4.48% |
| Composite Net | 0.88% | 3.81% | 4.14% | 1.90% | 1.61% | 2.19% | 3.94% |
| Bloomberg Barclays 1-3 Year U.S. Government/Credit Index | 0.69% | 3.42% | 4.64% | 1.82% | 1.59% | 1.52% | 3.80% |
| Inception: Jan 01, 1993 | 3M | YTD | 1YR | 3YR | 5YR | 10YR | Since Inception |
|---|---|---|---|---|---|---|---|
| Composite Gross | 1.02% | 4.24% | 4.71% | 2.46% | 2.12% | 2.55% | 4.48% |
| Composite Net | 0.88% | 3.81% | 4.14% | 1.90% | 1.61% | 2.19% | 3.94% |
| Bloomberg Barclays 1-3 Year U.S. Government/Credit Index | 0.69% | 3.42% | 4.64% | 1.82% | 1.59% | 1.52% | 3.80% |
Past performance cannot guarantee future results. Investing involves risk, including the possible loss of principal and fluctuation of value. Returns greater than one year are annualized. Returns are expressed in U.S. dollars. Composite returns are net of transaction costs and gross of non-reclaimable withholding taxes, if any, and reflect the reinvestment of dividends and other earnings.
The gross performance results presented do not reflect the deduction of investment advisory fees and returns will be reduced by such advisory fees and other contractual expenses as described in the individual contract and Form ADV Part 2A.
Net performance results do not reflect the deduction of investment advisory fees actually charged to the accounts in the composite but they do reflect the deduction of model investment advisory fees based on the maximum fee rate in effect for the respective time period, adjusted for performance-based fees where applicable. Actual advisory fees may vary among clients invested in the strategy shown and may be higher or lower than model advisory fees. Returns for each client will be reduced by such fees and expenses as negotiated in any client contract as discussed in Form ADV Part 2A.
For a complete list of holdings as of the most recently available disclosure period, contact us.
The gross performance results presented do not reflect the deduction of investment advisory fees and returns will be reduced by such advisory fees and other contractual expenses as described in the individual contract and Form ADV Part 2A.
Net performance results do not reflect the deduction of investment advisory fees actually charged to the accounts in the composite but they do reflect the deduction of model investment advisory fees based on the maximum fee rate in effect for the respective time period, adjusted for performance-based fees where applicable. Actual advisory fees may vary among clients invested in the strategy shown and may be higher or lower than model advisory fees. Returns for each client will be reduced by such fees and expenses as negotiated in any client contract as discussed in Form ADV Part 2A.
For a complete list of holdings as of the most recently available disclosure period, contact us.
Commentary & Literature
2Q19 Portfolio Commentary Highlights
- Both Treasuries and corporate credit performed well during the quarter as the Fed’s pivot to a more accommodative stance evolved into potential rate cuts in 2019.
- Our more conservative approach to interest rate risk relative to the benchmark led to underperformance, but the Portfolio did generate positive returns.
- Macro uncertainties, including slower global growth and trade tensions, will likely lead to more accommodative monetary policy from the Fed and other developed world central banks.