Liquidity and preservation of capital. The strategy’s benchmark is the Lehman Brothers 1-3 Year Government Bond Index.
Emphasize a fundamental, bottom-up research process to identify relative value opportunities and enhance total return, while limiting volatility. Add value primarily through actively managing sector and security selection while controlling portfolio duration to within +/- 15% of the benchmark.
GEAM utilizes a disciplined team approach to actively manage duration, sector allocation and security selection within a risk-controlled environment. Although all fixed income decisions incorporate interest rate expectations, in our view, duration management is not a primary source of returns in the short-term duration strategy. The main drivers of performance are expected to be sector allocation and security selection. Sector portfolio managers provide a rigorous analysis of both fundamental and technical drivers of sector performance. Using this analysis against our current macro-economic view, the team collectively decides to over or underweight a sector versus the benchmark. Security selection within each sector is the responsibility of each sector portfolio manager. Individual securities are selected for investment by a relative value process, which incorporates current market valuations provided by GEAM traders and in-depth fundamental research provided by GEAM’s fixed income research team. Investment decisions are viewed in a three to six month horizon.
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