Delivering the best of our capabilities to you
From a globally integrated investment platform, our Fixed Income teams are able to offer a diverse product spectrum to meet the unique individual needs of clients from around the world.
Our fixed income capabilities go beyond the 'core' government and corporate bond sectors and extend to other sectors such as high yield and emerging market debt as well as unconstrained and currency strategies.
We combine these capabilities to create country, regional and global strategies and customized solutions with a wide range of benchmarks that are available through a variety of investment vehicles to retail and institutional clients worldwide.
Bringing our expertise to you
Finding the answers you need – our investment approach
Our fixed income investment philosophy centers around three principal tenets:
Robust research process
- To meet the demands of a globally integrated world, our robust research process connects our global overview with the insight of regional specialists.
Diversification of alpha sources
- We diversify by time horizon, and by exploiting the full opportunity set: credit beta, credit sector, choice of security, duration, yield curve, and country allocation.
- Further diversification comes from using a blend of judgement and models, combining top down macro inputs with bottom up security selection, as we seek to generate consistency of credit alpha.
- Risk control is an integral part of the fixed income investment process. It is not simply an adjunct.
Salomon Smith Barney World Government Bond Index
Maximize total return, consisting of both capital appreciation and current income, by investing in investment-grade global debt securities, with the majority of investments generally in sovereign, agency and supranational debt issues.
To select the most attractive fixed income securities within each country or market, investment management makes its decisions within a global asset allocation framework and synthesizes the ideas of senior fixed income professionals around the world.
- Global macroeconomic and political analysis determines optimal country and currency weightings, and a maturity mix that provides opportunity for appreciation, while aiming to limit interest rate risks.
- Fundamental company research to determine intrinsic value of securities.
J.P. Morgan Corporate Emerging Markets Bond Index Diversified
Seeks to outperform the benchmark by investing in emerging markets corporate bonds denominated in USD, and may also invest in emerging markets sovereign and/or quasi-sovereign bonds should corporate bond risk premiums over sovereign bonds be deemed unattractive.
We employ top-down macroeconomic and bottom-up credit research to develop investment themes and select appropriate securities.
By balancing top-down and bottom-up analysis, the investment process brings together extensive experience as well as a diversity of thought and opinion from the fixed income investment committee, the emerging markets debt strategy team, and the credit research team – supported by quantitative tools and models.
- Top down analysis focuses on the global macro framework. It explores global macroeconomic trends, examines macroeconomic factors, and scrutinizes the macroeconomic risk framework.
- Bottom-up analysis focuses on countries and sectors, considering economic, political and social factors.
- Based on the combined results, the overall allocations and risk budget are defined for the strategy, which is then implemented in specific portfolios with individual exposures to regions, countries, sectors, spreads, and currencies.
- Each portfolio is subject to continuous monitoring of positions and risks.
J.P. Morgan Emerging Markets Bond Index Global (EMBIG)
Outperform benchmark by investing in a wide range of emerging market fixed income securities issued by sovereign, agency and corporate borrowers.
- Discrepancies sometimes occur between securities' market prices and their fundamental values.
- In the case of emerging markets debt, price volatility can exceed that of underlying macroeconomic fundamentals.
- We seek to take advantage of these discrepancies by using a disciplined approach to estimate fundamental value.
- Credit selection - In our price/value framework we search for bonds with the potential to deliver strong performance, given the firm's country and market views.
- Risk management - During portfolio construction we evaluate potential trades within a risk management framework, which compares our portfolio to its benchmark.
- Feedback - Detailed analysis allows us to measure the impact of every country and security decision made.