U.S. Core Plus Fixed Income
At a Glance
- Primary Benchmark: Bloomberg U.S. Aggregate Index
- Investment process applies the top-down macroeconomic investment themes of our Global Fixed Income team
- U.S.-centric fixed income solution that prudently allocates to less traditional market segments in an effort to deliver improved outcomes
- Investments typically are concentrated in sectors and individual issuers that we believe offer the best total return potential
Objective
The strategy's objective is to achieve total return through a combination of current income and capital appreciation. Brandywine Global’s goal is to outperform the Investment Benchmark by 1.5% (net of fees), on an average annual basis, over a full market cycle.
Investment Philosophy
We believe that with our top-down, macroeconomic-driven investment approach to seeking value and anticipating risk, we can consistently outperform the Bloomberg U.S. Aggregate Index.
Investment Process Summary
Strategic portfolio decisions, including duration, yield curve exposure, credit exposure, and sector weightings, are based upon the broad investment themes of our global macroeconomic research platform congruent with valuation. The portfolio management team develops a viewpoint on both the valuation opportunity and the business cycle and positions the strategy's duration, sector weighting, and credit exposures accordingly.
Portfolio Construction
The strategy invests in fixed income securities and cash or cash equivalents. We believe skillfully toggling between safehaven and risk-seeking betas can lead to superior risk-adjusted outcomes overtime, and the potential for material increases in absolute return figures. We expect to have exposure in the following sectors: Treasuries, Corporate – IG, Corporate – HY, Agency and Non-Agency ABS/MBS, and Non-US sovereigns, with a focus on U.S. fixed income. Portfolio holdings are limited to our highest conviction ideas.
Duration Management
Portfolio duration typically can range +/-5 years from the benchmark. We have the flexibility to reduce portfolio duration should we believe duration risk poses a significant threat to capital preservation.