We invest predominately in investment-grade corporate bonds on a global basis, based on the principle that returns in the corporate bond market are driven by macroeconomic, asset, sector and stock-level factors.
As different factors dominate returns at different stages of the economic cycle, we apply a dynamic investment approach. We can change the blend of duration and credit exposure to give appropriate weight to those drivers of returns at each stage of the cycle.
At the macroeconomic level, duration, geographic positioning and yield curve views are emphasised. At asset class level, we may invest across the full range of investment-grade corporate bonds, high yield bonds, government bonds and cash, choosing between fixed and floating rate bonds and nominal and index-linked bonds. Sector selection aims to be a driver of returns.
Bottom-up fundamental analysis is used to determine our credit selection and narrows our focus on individual names from which to pick the best relative value opportunities.