Global Multi-Sector Income
At a Glance
- The investment objective for the strategy is to generate attractive income and provide capital preservation
- Portfolio construction combines macroeconomic, country, and currency themes with fundamental sector and security selection analysis
- Derivatives may be used to enhance credit exposure in advantageous market conditions or, more commonly, as a hedging mechanism to protect principal during market drawdowns, manage portfolio volatility, and dampen idiosyncratic market risks
- Investments typically are concentrated in sectors and individual issuers that we believe offer the best combination of yield and total return potential while minimizing potential loss
- Portfolios normally consist of 100 to 250 corporate, sovereign, or securitized issuers
Global Multi-Sector Income is a flexible, value-oriented strategy that seeks attractive income and aims to preserve and grow capital over a market cycle with an emphasis on strong, risk-adjusted total return by dynamically allocating across the global fixed income market.
The investible universe includes a broad mix of global securities, primarily fixed income assets, including but not limited to: sovereign debt, emerging markets debt, global high yield or investment-grade credit, structured credit, convertible securities, and currencies. Derivatives are employed to enhance credit risk, broaden income opportunities, or limit market risk in challenging market environments.
The strategy applies a differentiated and proven process that combines analysis of macroeconomic conditions with bottom-up fundamental research to identify global value anomalies and cross-sector opportunities that we believe offer the most compelling combinations of valuations and durable fundamentals.
Dual Approach: Top Down Macroeconomic Analysis with Bottom-up Fundamental Research
We incorporate macroeconomic themes when structuring the Global Multi Sector Income strategy. The top-down process establishes the cyclical quality bias and the beta-hedging themes. Macroeconomic country and currency perspectives are combined and incorporated with fundamental analysis in determining sector allocation and issue selection.
Fundamental research is grounded in evaluation of business model (and cash flows), specific issuer bond covenants, recovery rate, and position in the capital structure. We aim to identify sectors and issuers that offer greater yield and total return potential with lower risk.
Dynamic Rotation Provides Diversified Sources of Alpha
The strategy’s dual approach provides the global perspective to respond to multiple business cycles across the globe, rotate the portfolio to the economic environment, and proactively manage interest rate and credit risks. Sector rotation, idiosyncratic security selection, duration management, and quality rotation are actively applied across the global fixed income universe to generate diversified sources of alpha and attractive upside potential.
Risk-focused for Downside Protection
The team responds actively to the macro environment, using safe-haven duration, prudent quality rotation, derivatives, and other tools to minimize downside volatility. Non-base currency exposures are limited to help reduce overall volatility.