To exceed the return of the Barclays Capital US Aggregate Bond Index over a three to five year period.
A combination of top-down positioning with fundamental, bottom-up issue selection managed within a disciplined risk framework should produce above market returns while limiting volatility around the benchmark. Our fundamental analysis incorporates several proprietary quantitative investment management tools. We seek to add value through active management of sector allocation, security selection, and tactical allocation to the high yield and emerging markets debt sectors, while controlling duration to within +/-1 year of the benchmark.
The strategy is managed using a team approach. On a monthly basis, the investment team determines portfolio positioning with respect to (1) the interest rate risk (duration and yield curve positioning), (2) sector weighting relative to the benchmark, and (3) tactical allocations to the high yield and emerging markets debt sectors. Duration and yield curve positioning are based primarily on our analysis of macroeconomic fundamentals, monetary policy, and expectations implied by current market pricing. Sector allocation relative to the benchmark is determined by fundamental and technical drivers of sector performance on scorecards generated each month by the sector portfolio managers. Allocations to the high yield and emerging debt asset classes are based on our credit outlook for those sectors and the relative value opportunities present. Sector portfolio managers are responsible for selecting individual securities within their respective sectors. Fundamental and relative value analysis enhanced by quantitative tools form the basis for security selection and ongoing monitoring. GE Asset Management’s broad-based credit research infrastructure performs in-house analysis leveraging our equity analysts and the GE global network. GE Asset Management’s rigorous risk management and compliance processes support the investment process.
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