Our approach

Our portfolio construction process draws from the firm’s broad research resources to integrate investment ideas generated through in-depth analysis.

Bond issues are assessed through internally-developed categories to efficiently allocate risk, rather than through traditional benchmark classifications for sector or industry. In this way, the strategy seeks to break down credit markets in a distinct manner, seeking to add value through discovery of additional sources of alpha and risk reduction.

The strategy emphasizes downside protection, and applies overall volatility, tracking error and individual issuer limits. Duration is typically kept within ±1 year of the Bloomberg Barclays U.S. Long Government/Credit Index.

Benefits

Investment grade bonds offer the potential benefits of attractive yields and enhanced diversification. Our unique approach to portfolio construction expands these benefits through additional sources of alpha and risk reduction.

Portfolio construction as an alpha source

We break down and analyze credit markets in unique ways in order to uncover additional opportunities for alpha and risk reduction for clients.

A better understanding of the benchmark

Our custom framework categorizes bonds by risk characteristics, rather than by traditional classifications of sector or industry. That gives us a head start in identifying bonds with the best risk/return opportunities.

A wide-angle view of risk

Our scenario modeling and risk allocation system analyses our best ideas across a wide spectrum of market environments to help us deliver excess returns regardless of the direction of credit spreads, with focus on downside protection.

Key risks

Investment grade bonds have a reputation for safety due to their higher credit quality ratings. However, investing in bonds is not without risk.

Investment risk

The value of an investment and any income from it can go down as well as up. Investors may not get back the original amount invested.

Credit risk

Bond values are affected by changes in interest rates and the bond issuer's creditworthiness. Bonds that offer the potential for a higher income typically have a greater risk of default.

Illiquid securities risk

Certain assets held in the strategy could, by nature, be hard to value or to sell at a desired time or at a price considered to be fair (especially in large quantities), and as a result their prices could be very volatile.

U.S. Investment Grade Strategies

Aviva Investors
U.S. Long Government Credit

The U.S. Long Government Credit strategy is an investment solution designed to invest in long duration U.S. Investment Grade Credit, U.S. Agency and U.S. Government securities benchmarked to the Bloomberg Barclays U.S. Long Government Credit Index. At least 25% of the total assets within the strategy will be held in Government Bonds (U.S. Treasuries and U.S. Agencies), and a single issuer’s market value will be no greater than 3%.

Aviva Investors
U.S. Long Credit

The U.S. Long Credit strategy is an investment solution designed to invest in long duration U.S. Investment Grade Credit benchmarked to the Bloomberg Barclays U.S. Long Credit Index. The investable universe for the strategy includes benchmark eligible securities. Government, government agency, and cash are also allowed, along with 144A securities that have characteristics and liquidity resembling index-eligible public bonds.

Aviva Investors
U.S. Credit

Aviva Investors’ US Credit strategy is an investment solution designed to invest in US investment grade credit benchmarked to the Bloomberg Barclays US Credit Index. The investable universe for the strategy includes benchmark eligible securities. Government, government agency, and cash are also allowed, along with 144A securities that have characteristics and liquidity resembling index-eligible public bonds.

Need more information?

For further information, please contact our investment sales team.

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