Investment Philosophy

The Corporate Fixed Income Strategy is a single sector product, investing primarily in the investment grade corporate fixed income market.

PGIM constructs and manages portfolios in the Corporate Fixed Income Strategy based on the philosophy that bottom-up industry and issue research and security selection, including relative value trading, generate high information ratios and, when executed successfully, can provide sustainable excess return over a corporate market benchmark.

• We seek to capture several market inefficiencies when investing in US investment grade corporate bonds.
• We seek to anticipate both positive and negative credit events before others do, through our large internal credit research staff.
• We also try to cover a larger portion of the US corporate bond market than others, more comprehensively.
• To do so, we organize our large corporate bond team by industry/subsector, fostering an in-depth knowledge of many companies, including ones not always followed closely by Wall Street.
• We seek to capture aberrations in the yield curve, using proprietary modeling. Finally, we seek to capture inefficiencies driven by supply/demand and other technical factors, such as a dislocation in spreads among different maturity bonds of the same issuer.

Our Corporate Fixed Income Team has been consistently implementing this research-based, relative value philosophy for many years, including through 2000-2002’s credit cycle as well as the 2007-2008 credit crisis, two of the most volatile in history.