Active Fixed Income Solutions
Exploiting opportunities across increasingly complex markets
Overview
As markets have become increasingly complex and interconnected, having a specialized and experienced team is imperative for today’s asset managers. To help navigate markets, clients can achieve their objectives by taking an active approach to fixed income. LGIM America’s active fixed income strategies offer clients access to investment professionals with extensive credit experience, deep market intelligence and a disciplined investment approach.
Our philosophy
At LGIM America, we fundamentally believe that investment grade credit is an inefficient asset class driven by a combination of rating agency actions, liquidity constraints and index construction. As a result, we seek to consistently add value for our clients through security selection, asset allocation and sector rotation.
Our people
The Active Fixed Income Investment Grade Credit team includes dedicated portfolio managers, credit research analysts, quantitative strategists and traders, who are organized in sector pods, where the lead portfolio manager is a sector specialist and works in conjunction with a focused research analyst and trader. This allows best ideas to be implemented most efficiently, shortening the time from ‘idea’ to ‘trade.’
Our process
Our disciplined approach combines top-down macroeconomic considerations with bottom-up fundamental credit analysis that focuses on avoiding credit downgrades and defaults.
Asset allocation decisions are formulated within the monthly global strategy process conducted with our teams of professionals worldwide as we leverage the global footprint of LGIM. The objective is to identify where the credit cycle is headed and produce a short- and long-term credit outlook.
An experienced credit research team conducts comprehensive bottom-up issuer analysis, including an assessment of an issuer’s risk of default. Research analysts will assign a fundamental recommendation to an issuer. This recommendation is the starting point for credit decisions and aims to provide context when discussing relative value views. Business risks as well as financial risks are included in the assessment. The recommendation is combined with a security’s valuation, covenants, technicals and other features to determine a relative value score. A score is provided on a scale of +3 to -3 where 0 is an expected return in-line with the sector benchmark.
We seek to construct portfolios in a risk-controlled manner, focusing on sectors and securities where research can add the most value while tightly controlling duration and yield curve exposure.
Our flagship strategies
We offer a range of investment grade credit strategies to help our institutional clients manage their investment objectives, from market-based alpha-oriented credit strategies to those designed to match a liability-based benchmark. A summary of our flagship investment grade credit strategies is presented below.
US Credit Strategy
Long Duration US Credit Strategy
Long Duration Government/Credit Strategy
Long Duration US Corporate Strategy
Liability Aware Long Duration US Credit Strategy
Benefits of partnering with us
We seek to add value for our clients by focusing on avoiding defaults and downgrades.
Our established corporate relationships aid us in identifying potential credit issues as well as potential opportunities.
We aim to offer deep market intelligence and insights grounded in our experience across market cycles.
2023 CIO Industry Innovation Award - Public Fixed Income
CIO has selected LGIM America as the 2023 Industry Innovation Award winner for Public Fixed Income. The CIO awards centered on allocators driving change and enhancing institutional fund performance and the service providers driving innovation in institutional investing.1
Read our insights
We publish a range of research articles and publications covering key themes in financial markets and topical investment commentary.
1. Chief Investment Officer, 2023 Asset Management & Service Providers survey. Nominees are anonymously submitted by their peers across the industry. Finalists and winners are chosen from the nominee pool by the CIO editorial team in conjunction with an advisory board of former and current CIOS. LGIMA did not compensate CIO for its award. https://www.ai-cio.com/news/cio-announces-2023-industry-innovation-award-winners. This award does not imply that LGIMA will or has been successful in its product offerings or services.
The material provided is for informational purposes and is not intended as a solicitation to buy or sell any securities or other financial instruments or to provide any investment advice or service. The information contained in this presentation, including, without limitation, forward looking statements, portfolio construction and parameters, markets and instruments traded, and strategies employed, reflects LGIMA’s views as of the date hereof and may be changed in response to LGIMA’s perception of changing market conditions, or otherwise, without further notice to you.
Accordingly, the information herein should not be relied on in making any investment decision, as an investment always carries with it the risk of loss and the vulnerability to changing economic, market or political conditions, including but not limited to changes in interest rates, issuer, credit and inflation risk, foreign exchange rates, securities prices, market indexes, operational or financial conditions of companies or other factors. Past performance should not be taken as an indication or guarantee of future performance and no representation, express or implied, is made regarding future performance or that LGIMA’s investment or risk management process will be successful.
In certain strategies, LGIMA might utilize derivative securities which inherently include a higher risk than other investments strategies. Investors should consider these risks with the understanding that the strategy may not be successful and work in all market conditions. Reference to an index does not imply that an LGIMA portfolio will achieve returns, volatility or other results similar to the index. You cannot invest directly in an index, therefore, the composition of a benchmark index may not reflect the manner in which an LGIMA portfolio is constructed in relation to expected or achieved returns, investment holdings, portfolio guidelines, restrictions, sectors, correlations, concentrations, volatility, or tracking error targets, all of which are subject to change over time.
Unless otherwise stated, references herein to “LGIM”, “we” and “us” are meant to capture the global conglomerate that includes Legal & General Investment Management Ltd. (a U.K. FCA authorized adviser), LGIM International Limited (a U.S. SEC registered investment adviser and U.K. FCA authorized adviser), Legal & General Investment Management America, Inc. (a U.S. SEC registered investment adviser) and Legal & General Investment Management Asia Limited (a Hong Kong SFC registered adviser). The LGIM Stewardship Team acts on behalf of all such locally authorized entities.