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Global Opportunistic Fixed Income

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Institutional Strategy > Fixed Income > Global Opportunistic Fixed Income

Global Opportunistic Fixed Income

A flexible strategy that seeks attractive risk-adjusted returns by investing across the entire global bond market with a focus on exploiting mispriced sectors.

  • Dynamic sector allocation - adaptive to changing market conditions
  • Multiple alpha sources - no persistent biases or tilts in the portfolio
  • Collaborative research driven process and robust risk management

Key Risks

Market Risk: The risk of a change in the value of a position as a result of underlying market factors, including among other things, the overall performance of companies and the market perception of the global economy.
Liquidity Risk: The risk that the portfolio may be unable to sell an investment readily at its fair market value.
Counterparty Risk: The risk that the portfolio may be unable to sell an investment readily at its fair market value.
Derivatives Risk: The strategy may use certain types of financial derivative instruments (including certain complex instruments). This may increase the portfolio’s leverage significantly which may cause large variations in the value of investments. Investors should note that the strategy may achieve its investment objective by investing principally in Financial Derivative Instruments (FDI). There are certain investment risks that apply in relation to the use of FDI.
Operational Risk: The risk of direct or indirect loss resulting from inadequate or failed processes, people and systems including those relating to the safekeeping of assets or from external events.
Interest Rate Risk: The risk of interest rate movements affecting the value of fixed-rate bonds.
Credit Risk: The risk that bond issuers may fail to meet their interest repayments, or repay debt, resulting in temporary or permanent losses to the portfolio.
Currency Risk: Investments in a currency other than the base currency of the portfolio are exposed to currency risk. Fluctuations in exchange rates may affect the return on investment. If the currency of the portfolio is different from your local currency, then you should be aware that due to exchange rate fluctuations the performance may increase or decrease if converted into your local currency.
Emerging Markets Risk: Emerging markets are likely to bear higher risk due to a possible lack of adequate financial, legal, social, political and economic structures, protection and stability as well as uncertain tax positions which may lead to lower liquidity. The value of a portfolio may experience medium to high volatility due to lower liquidity and the availability of reliable information, as well as due to the strategy's investment policies or portfolio management techniques.

Overview

The Case for a Dynamic Approach to Asset Allocation

A global opportunistic investment approach can provide efficient, diversified and dynamic exposure to the broader fixed income spectrum.

Investment Opportunities Vary Over Time

No one sector consistently outperforms or underperforms, making a dynamic approach to asset allocation and interest rate exposure necessary in today’s environment of elevated uncertainty and shifting returns across fixed income sectors.

Dynamic Approach

Annual Returns Data as at 30th September, 2019. Source: BofA ML Developed Market Sovereign Bond Index (WSAV), BofA ML Global High Yield Index (HW00), BofA ML Local Debt Markets Debt Index (LDMP), BofA ML Global Broad Market Corporate Index (G0BC), BofA ML EM External Sovereign Hard Currency (EMGB), S&P/LSTA Leveraged Loans (SPBDAL).

 

Investment Philosophy

The team believes:

  • The consensus market view often prices temporary factors into asset values as if they were permanent in nature, leading to market mispricings.
  • Price distortions can be exploited by investment managers with a disciplined valuation approach based on unique insights and convictions.
  • A relative value investment approach that seeks to incorporate multiple sources of alpha to avoid persistent biases to one sector or theme may generate incremental value over time.
 

About the Investment Process

The strategy focuses on determining a confidence level for each asset class in addition to expected returns. This process is combined with multiple layers of risk management at security, portfolio and firm levels.

This is intended as a broad overview of the Portfolio Manager’s style, philosophy and investment process and is subject to change without notice. Portfolio Manager’s views may differ from that of other portfolio managers as well as the views of the firm. Information is intended to be a general overview of the process, is as of the date of this presentation, and is subject to change without notice. See Additional Disclosures at the end of this material, which are an important part of this presentation.

 

Experienced and Stable Team

The Senior Portfolio Managers of the Neuberger Berman Global Opportunistic Fixed Income Strategy have an average 22 years of industry experience and 16 with the firm. The team is supported by over 140 investment professionals with expertise across the fixed income universe. The team is based across three continents with offices in North America, Europe and Asia, ensuring that markets are covered 24 hours a day.

Management

Brad Tank
Chief Investment Officer—Fixed Income
40 Years of Industry Experience
18 Years with Neuberger Berman
Ashok Bhatia, CFA
Deputy Chief Investment Officer—Fixed Income
28 Years of Industry Experience
3 Years with Neuberger Berman
Jon Jonsson
Senior Portfolio Manager—Global Fixed Income
26 Years of Industry Experience
7 Years with Neuberger Berman