Free your fixed income manager to source the richest variety of investment opportunities
The label ’unconstrained‘ has picked up in popularity in recent years within the fixed income world. But this term means different things to different people. In some cases, it is shorthand for a hedge fund. For others it means moving away from traditional fixed income benchmarks or the ability to add value in both rising and falling markets.
We have a straightforward view of what ’unconstrained‘ means. Simply put, we think the key to a successful fixed income portfolio is having an unconstrained opportunity set to invest in. An ’unconstrained’ approach to fixed income looks beyond traditional parameters such as region, sector, rating and benchmark constituents. This affords access to a larger universe of investment opportunities, and uncorrelated return and alpha drivers (above benchmark returns). As such, with careful management, we believe this approach provides greater scope for successfully meeting investment objectives and generating attractive risk-adjusted returns.
Unconstrained by a house view, we separate research from portfolio construction to better manage risks
Moving away from a centralised “house view”, we utilise a range of varied and uncorrelated alpha sources in our portfolios. Our investment managers implement an independent research, design and portfolio construction process. Decoupling idea generation and the associated research processes from portfolio design and construction allows us to better specify, manage, and improve our research processes, the driver of returns for the portfolios we manage. This active approach to fixed income helps improve the overall risk and return profile of the portfolio via both diversification of thought and underlying asset class exposure.
Measurable and managed investment ‘skill’ helps achieve our clients’ objectives
We believe the best way to achieve a client’s objective is to structure the design of the portfolio around clear, realistic skill targets, and measure the progression of skill achieved over time. We aim to objectively measure, manage, and improve our skill over time, determining what was possible and comparing this against what was accomplished.
Through alpha/beta separation, we can attach our alpha sources to a variety of benchmarks. This allows us to build tailored products in partnership with our clients to ensure we’re best placed to meet their investment objectives.
We have the advantage of a transparent & unique platform housing our investment decisions
Our Investment Opinion Network (ION) has been designed to ensure full transparency of our investment decisions to allow us to have meaningful discussions with investors around portfolio positioning, performance and outlook. While we certainly do not expect to always get it right (and our designs account for this), we do feel it is our obligation to dissect and understand our investment decisions and behaviour in order to communicate effectively to clients and become better investors tomorrow than we are today.
We believe that excellence in RI, operating to the highest standards of professional ethics and our commitment to our stewardship principles delivers better long term investment outcomes for our clients.
Our RI strategy is based upon three strategic pillars of quality, stewardship and engagement. This strategy is underpinned by a strong governance framework and is supported by our specialist RI team. Each year we publish a responsible investment and stewardship report which outlines our progress in these areas and profiles each of our investment team’s approaches to responsible investment. We also include over 30 case studies of responsible investment in practice