Investment Philosophy

Our fixed income investment approach is built around a globally-integrated, research-driven process. We believe that bond portfolios managed by a globally-integrated fixed income team within a disciplined, risk-controlled framework may produce strong risk-adjusted returns. We seek to add value in three ways: we draw upon the expertise of locally-based sector specialists and portfolio management teams; we employ internally-generated fundamental, quantitative and technical research; and, we allocate risk by using a rigorous and methodical portfolio construction process. We target diversified sources of portfolio returns and do not rely on any single strategy.

Investment Process

Our investment process seeks to leverage the global structure of our investors and research teams seeking to balance any outperformance between asset allocation and stock selection. To achieve this, the Global Government Bond Strategy follows a rigorous process of collecting research, constructing portfolio and monitoring risk.
Each quarter, the Investment Strategy Team meets to discuss the key factors driving the fixed income markets. At these sessions, 20 of our lead portfolio managers and sector specialists provide insight and debate factors likely to influence the markets over the coming quarters. This establishes the themes that will guide investment strategies for the upcoming quarter.
Each scenario is assigned a level of probability conveying the team’s confidence level. These scenarios and the resulting portfolio allocations are constantly monitored at individual sector and multi-sector meetings. The scenarios and investment themes do not establish portfolio positions, but rather serve as a framework for risk allocation, sector weightings and portfolio construction.

Once investment themes have been established, our sector specialists scan the market for investment (alpha generation) opportunities. Each team has developed a unique approach for analysing their sector, utilizing a combination of fundamental, quantitative and technical inputs to identify buy and sell targets. Research is a key differentiator and a means by which we aim to deliver world-class fixed income capabilities.
In addition to our fundamental research, we have developed a number of quantitative tools to provide objective, consistent and disciplined inputs into our assessment of prospective macroeconomic and policy developments. And finally, to complement the fundamental and quantitative approach, the team uses technical analysis to study past financial data to forecast price trends.

Our Global Rates team permanently monitors opportunities across the global rates universe, focusing on several key inputs, including: country allocation; yield curve positioning; duration; allocations to non-government sectors (such as SSA, covered bonds, etc.); and currencies.

Being constantly “risk aware” is of paramount importance when constructing portfolio, especially when investing in several asset classes. Our risk monitoring process integrates many aspects of risk, including correlation and liquidity analysis at each stage of the portfolio construction.
In addition to a permanent risk monitoring process, an independent Investment Director reviews regularly the integrity of the portfolio in relation to agreed guidelines and risk targets.

Ultimately, our portfolio managers are constructing portfolios perfectly tailored to each client’s objectives, risk tolerance and guidelines. The portfolios are constantly reviewed by the portfolio managers, ensuring key features and strategies incorporated in the portfolio correspond to markets opportunities that are constantly emerging in a fast changing markets environment.