Investment-Grade Corporates U.S. Corporate

Investment Objective

 PGIM Fixed Income’s U.S. Corporate Fixed Income Strategy is a single sector product, investing primarily in the investment grade corporate fixed income market. The Strategy is managed to achieve an excess return of +60 bps over a corporate market benchmark over a full market cycle with a tracking error budget of 100 bps.1,2

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.

Investment Philosophy

PGIM Fixed Income 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.

Individual security selection and subsector/industry rotation comprise the majority of alpha in the Corporate Fixed Income Strategy.

Security Selection:

35 bps

 

Subsector/Industry Allocation:

25 bps

 

Duration/Yield Curve:

0-5 bps

Investment Process

PGIM Fixed Income employs a disciplined, three-step investment process to manage U.S. Corporate Portfolios:

  1. Leverage firm resources to define the current global backdrop and risk appetite

  2. Portfolio strategy and construction

    Portfolio Strategy

    • Market strategists provide macroeconomic assessment

    • Senior investment professionals assess market environment and recommend sector allocations
    •  
    • Portfolio managers actively analyze benchmark
    Arrow Right

    Asset Allocation

    • Research teams conduct intensive in-depth evaluation of all issuers in the universe
    •  

    Expertise across all areas:

    • Fundamental
    • Structured
    • Quantitative
    Arrow Right

    Relative Value Analysis

    Expertise across all areas:

    • Choose regions & select countries that reflect macro perspective
    • Choose fundamentally strong credits with best relative value
  3. A rigorous process is employed to monitor risk at all levels

Senior Portfolio Managers

 

Steven Kellner

CFA, Managing Director and Head of Investment Grade Corporates