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The investment objective of the Intermediate Core Fixed Income Strategy is to outperform Bloomberg Barclays U.S. Intermediate Aggregate Index (the "Index") or similar index by +50 bps.1,2
PGIM Fixed Income’s Intermediate Core Fixed Income portfolios are managed based on the philosophy that research-driven security selection is the most consistent strategy for adding value to client portfolios. We complement that base strategy with modest sector rotation, duration management, and disciplined trade execution. Risk budgeting is central to our approach.
The Strategy tends to generate its excess return over benchmark from fairly equal increments of both sector allocation and subsector/security allocation. Duration and yield curve positioning have historically not been primary sources of excess return but will be considered when exceptional market opportunities dictate. The Strategy is predominately investment grade-focused, but, if individual client guidelines permit, will allocate modestly to non-benchmark high yield bond and emerging markets debt sectors.
PGIM Fixed Income employs a disciplined, three-step investment process to manage Intermediate Core Portfolios:
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.