To achieve above average performance over a broad U.S. investment grade fixed income benchmark.
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.
The strategy is managed using a team approach. On a monthly basis, the investment team, which includes the Chief Investment Officer and sector portfolio managers, decides on portfolio positioning with respect to (1) the interest rate risk of the portfolios (duration and yield curve positioning) and (2) sector weightings relative to the benchmark. 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 sector scorecards generated each month by sector portfolio managers. Sector portfolio managers have responsibility for selecting individual securities within their respective sectors. Fundamental research and relative value analysis form the basis for security selection. A large, experienced research team performs in-house analysis leveraging GEAM equity analysts and the network of GE businesses. Proprietary, quantitative models and well-defined diversification rules support the process and provide risk controls.
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