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Strategy Assets
$1.8B
Track Record
6 Years
Investment Objective
The objective of the Flexible Fixed Income Strategy is long-term total return, which includes income and capital appreciation. Capital preservation is also a consideration. Specifically, the strategy seeks:
Strategy Overview
A fundamental, absolute value fixed income strategy designed to seek to generate attractive long-term returns while preserving capital. The portfolio is built by individually selecting securities across a high-quality fixed income universe alongside opportunistically investing in non-investment grade debt, independent of bond market proxies.
| Investment Style | 36-Month Absolute Return, Value |
|---|---|
| Opportunity Set | Investment Grade and Non-Investment Grade Debt (U.S.) |
| Approach | Bottom-Up Fundamental |
| Strategy Assets | $1.8B |
| Sector Constraints | None |
| Illustrative Benchmarks | Bloomberg U.S. Universal |
| Strategy Inception | May 2019 |
| Vehicle Availability | Mutual Fund: FPA Flexible Fixed Income Fund |
Strives to be a low volatility, flexible bond strategy that seeks to provide positive absolute returns in a 36-month period, positive real returns over five-year periods, and competitive returns versus bond market universe.
Typically, holds investments to maturity, unless valuations increase to levels well above par. Generally, the strategy purchases cash bonds and does not rely on derivatives to build/manage exposures.
Aims to achieve both a return of capital and a return on capital by selecting investments that offer adequate absolute returns to offset interest rate and credit risks. Its flexible, value-focused duration and credit management approach enables it to respond effectively to evolving market conditions.
Has the flexibility to adjust exposures to different sectors and credit quality based on market conditions. For example, it can increase its exposure to credit rated BBB & below (up to 75% of portfolio assets) during periods of distress and reduce this exposure when credit is perceived as overvalued. As another example, its current significant allocation to securitized bonds distinguishes us from broad U.S. bond market indices (i.e. the Bloomberg U.S. Universal Index).
Information Request
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