Fixed income investment remains a key component as our investment managers seek to optimize the balance between risk and return.
In most recent years, striking an ideal balance has become a more challenging practice as traditional allocation policies have been confronted with a number of unprecedented challenges.
Economic events and market conditions have begun to highlight the shortcomings of modern portfolio theory, whereby levels of correlation are much less predictable and are often closely tied to the effects of volatility.
Focused on quality issues
Our fundamental approach in pursuit of balancing the benefits of portfolio diversification is an evolving process that seeks to place emphasis on the quality of issuer credit.
In light of events occurring over the past decade, we believe that merely focusing on highly indebted issuers and the potential of their corresponding coupons essentially increases investment risk to levels typically associated with equity positioning.
By focusing on quality issues, trading requirements are much less frequent, removing the need to access an increasingly fractured bond market in search of liquidity.
High conviction investment approach
Incorporating quality bond issues as a diversification component enables the portfolio manager to anticipate and react to market events, and react to the effects they have on other areas of the asset allocation mix.
We focus our efforts on identifying opportunities where we believe significant scope to exploit inefficiencies exist. Particularly across Asian markets, our fixed income capabilities combine local expertise with a broader perspective of global micro and macro insights from a range of fixed income corporate and sovereign platforms.
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