Table of Contents
The investment objective of the Global Dynamic Bond strategy is to outperform the 3-Month U.S. Dollar LIBOR Index (the "Index") by +500 bps over a full market cycle on a total return basis.1,2
The Global Dynamic Bond strategy is an actively managed strategy that combines "best ideas" from macro top-down and credit/country bottom-up teams across PGIM Fixed Income opportunistically using geography, asset class and sector ideas to find alpha generating trades. Portfolio positioning at any given time is based on where we believe the most attractive risk-adjusted values lie across the investable universe. The strategy is designed to provide flexibility to respond to changing market opportunities to both generate alpha and to mitigate downside risk diversifying across individual issuers, industries and country positions.
PGIM Fixed Income employs a disciplined, four-step investment process to manage Global Dynamic Bond portfolios:
1. Top Down Risk Allocation:
Assess global appettite for risk to determine portfolio risk profile, leveraging firm's resources.
2. Asset Allocation - Global Rates, FX, & Spread Sector Allocation:
Determine country/term structure, currency, and sector positioning. Ideas from sector specialists are emphasized.
3. Security Selection & Relative Value:
Bottom-up research-based approach. Sector specialists and research analysts aligned by sector/industry.
4. Risk Management:
Employ a rigorous process to tightly monitor risk as all levels. Use proprietary tools to verify performance achieved is appropriate for risk taken.
1 There is no guarantee that these objectives will be met.
2 On average, over a full market cycle defined as three to five years.
No risk management technique can guarantee the mitigation of elimination of risk in any market environment.
Source: PGIM Fixed Income as of September 30, 2020.