Balanced

Decades of investing have taught us investor perceptions fluctuate much more widely than underlying fundamentals. That’s why we believe it’s impossible to predict short-term price movements. Instead, we invest across a three- to five-year horizon, focusing on the fundamental factors of companies and other issuers that we believe matter most in the long term. We use short-term bouts of volatility or uncertainty to lean into opportunities if our analysis shows an investment to be fundamentally sound.

Our team of Global Industry and Fixed Income analysts are the engine for idea generation and risk analysis across our investment strategies. Our analysts cover the entire capital structure of companies globally, giving us the depth of understanding crucial to developing a well-informed investment opinion of both Credit and Equity investments. We believe this structure serves as a key source of differentiation and value-add for our clients, enabling us to better understand an investment's potential opportunities and risks.

A strong price discipline is an essential characteristic of our investment philosophy. When a company’s valuation reflects pessimism about its current challenges or overlooks its growth potential, we may see a potential long-term opportunity. Conversely, a great company may not be a great investment if its valuation is too high relative to its long-term profit outlook. For fixed income, starting price and starting yield are key components of future investment return, so we continuously evaluate valuation relative to the risks and opportunities we uncover from our research.

We believe the primary investment risks are the possibility of permanent loss of capital and erosion of future purchasing power. Evaluating these and other risks involves analyzing downside scenarios, and determining if we are being adequately compensated for them over our investment horizon. By building our knowledge of each holding and analyzing overall portfolio risk exposures, we seek to manage risk effectively and help our clients achieve their investment objectives.

Asset allocation is a critical determining factor in managing portfolio risk. In most environments, the equity allocation enables greater participation in growth opportunities, whereas the fixed income allocation helps safeguard principal and provides income. We align our decision-making process with our analyst-driven approach for determining which securities to own. Our Portfolio Strategy team researches, models, and makes asset allocation recommendations. This “top-down” process augments our analysts’ bottom-up research of companies and issuers, and helps better inform our understanding of potential risks and rewards as we determine the portfolio's asset allocation.