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“Our process utilizes both quantitative tools and qualitative judgments to select a diversified portfolio of high-quality, short-term issues that seeks to deliver above market returns over time, regardless of the environment.”

— Leonard Aplet, Senior Portfolio Manager, Head of Short Duration

Investment Approach

The strategy seeks to generate a high level of current income and preserve principal by investing primarily in high-quality, short-term fixed-income securities. The strategy focuses on high-quality issues in an effort to maximize yield, manage risk and limit price volatility. Portfolios seek competitive risk-adjusted returns over time by avoiding excessive interest-rate bets, and aim to outperform the Barclays Capital 1–3 Year Government/Credit Index, as well as the BofAML 1–3 Year Treasury Index, in a variety of economic environments.

Distinguishing Features

  • Tenured and experienced fixed-income team over multiple interest-rate-cycles
  • Disciplined process incorporates qualitative and quantitative inputs
  • Focus on minimizing volatility in the context of a diversified, high-quality portfolio (AA or better)
  • Management focused on client service and institutional needs
  • A history of strong risk-adjusted performance over time versus benchmark and peers

Investment Process

Top-down assessment
  • Macro assessment
  • Relative value of sectors

Result: Framework for portfolio construction

Research and analysis
  • Relative yield vs. market
  • Cash-flow certainty
  • Fundamental outlook

Result: Candidates for purchase within targets for sectors, duration and yield-curve positioning

Client portfolio construction
  • Rolling down the curve
  • Break-even analysis
  • Scenario testing

Result: Diversified portfolio of at least 75 to 100 issues

Monitoring and risk management
  • Tactical adjustments
  • Daily pre- and post-trade compliance

Result: Positioning that seeks to outperform on a risk-adjusted basis