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“Our objective is to provide positive risk-adjusted returns relative to the performance benchmark that best represents our client’s financial goals.”

— Carl W. Pappo, Senior Portfolio Manager

Investment Approach

Columbia Core Fixed Income offers a diversified portfolio of high-quality securities that strives to take advantage of opportunities within the general risk parameters of the benchmark. Our investment approach focuses on achieving attractive returns proportionally greater to the risk assumed. We combine this philosophy with bottom-up independent research of each opportunity and diversification with the goal of reducing risk and cushioning volatility.

Distinguishing Features

  • Experienced investment team, with key managers averaging more than 20 years in the industry*
  • High-quality portfolios focused on capturing relative value opportunities by emphasizing attractive subsectors or issues with characteristics that we believe are biased to outperform
  • Clear focus on evaluating potential returns against the asymmetric nature of risk inherent in fixed-income securities – incorporating mean reversion of yield curve and spread relationships
  • Strong historical outperformance compared to benchmark and peers through credit and market cycles

Investment Process

The Columbia Core Fixed Income team constructs its portfolio using the following approach:

Deconstruct portfolio benchmark

Segregate benchmark into risk components and characteristics

Identify relative value

Utilize proprietary and outside analytics to apply quantitative and fundamental metrics to identify relative value opportunities

Construct portfolio

Portfolio managers collaborate with analysts and traders to select issues and construct a portfolio considering:

  • Liquidity
  • Credit
  • Capital structure
  • Structure profile
  • Yield curve
  • Roll potential
Monitor portfolio and manage risk

Monitor adherence to portfolio risk limits relative to benchmark and client guidelines.

  • Monthly surveillance of collateral on structured credits
  • Relative credit exposure monitored to subsector and issuers by yield and quality
  • Rebalance as necessary

*as of 6/30/12