Fixed Income Investment Process
We believe we can make money for our clients throughout each stage of the business cycle.
Our monthly, strategy-setting process commences with a consideration of the main economies across the world. We then consider global interest rates and credit risks in global investment grade and high yield markets. Our process integrates this top down macro view with a bottom up stock picking view, considering credit ratings, industry sectors and individual company preferences.
The monthly strategy process is supplemented by, and monitored at, formal weekly meetings, morning team meetings and ongoing global credit and interest rates research.
The chart below illustrates how we generate ideas and analysis to create a strategy supported by the entire team. The strategy is then implemented by each fund manager in line with their funds' performance objectives and risk controls.
We combine the roles of fund manager and analyst, which we believe has significant benefits and advantages. As analysts, our team are fully responsible for how their interest rate, asset allocation and stock recommendations perform within a client's portfolio. As fund managers, they can challenge the relative value of strategic and tactical recommendations from others. This ensures research and idea generation are 'close' to client portfolios, which in turn allows for timely action and clear, practical decision making.
We believe an effective way to add value is to have concentrated portfolios, and therefore our funds hold on average 50 to 70 stocks. This is important because it means each idea has a greater chance of making a positive impact on performance.
We recognise that any opportunity to add value is also a source of risk. We monitor and manage total risk within all our funds. For example, our risk modelling systems allow us to assess the impact of portfolio positions before they are implemented. And our trading systems check for breaches of client fund position limits prior to the implementation of trades.
Our clear, robust and repeatable investment process has helped us deliver excellent long-term performance.