The Columbia Investment Grade Corporate Long Duration Fixed Income strategy seeks to exploit opportunities that exist in the corporate bond market, focusing on security selection and industry rotation as the primary sources of value added.
First, we seek to exploit sub-optimal time horizons that have become a feature of the investment grade credit market. With no tolerance for short-term underperformance, many credit investors make decisions that are an overreaction to minor data, or make decisions that seek to perfectly time turning points in credit direction.
The second opportunity is what we perceive to be degradation in the quality of fundamental analysis in the market today. Our investment approach focuses on fundamental credit work, and being able to price the risk/reward of that work over our time horizon. In a market that determines prices based on the next headline or on noise, the depth of credit research that we employ allows us to attempt to capture value based on the mistakes of others.
Distinguishing FeaturesIntensive, independent proprietary research
- Proprietary process resulting in a deep understanding of issuer and industry dynamics
- Portfolio managers and credit analysts work together on investment decision-making and portfolio construction, fostering a collaborative environment that allows the Team's best investment ideas to emerge
- Quantitative risk management and qualitative risk assessments seek to minimize portfolio relative volatility. Well-diversified portfolios provide the opportunity to generate multiple sources of alpha.
Investment ProcessRigorous bottom-up fundamental credit research
- Strong and independent research is the cornerstone of our process
- Proprietary risk and relative value rating system
- Small yield give ups in order to increase portfolio liquidity
- Change in fundamental credit assessment can result in immediate purchase or sale
- Experienced and dedicated portfolio managers and analysts are full partners in the portfolio construction and monitoring process
- The Team seeks to maximize return per unit of risk
- Well-diversified portfolios provide multiple potential sources of alpha, and allow the Team to let credit ideas come to fruition over the long term