The Investment Quality Bond Fund seeks to maximize total return by focusing on sector allocation, security selection, and yield curve positioning. The fixed income process is team-based and utilizes both quantitative and fundamental disciplines.
Philosophy & Process Highlights
INCORE Capital’s fixed income investment philosophy is based on the team’s belief that skillful portfolio management can deliver superior total and risk-adjusted returns by taking advantage of bond market inefficiencies in three key ways:
Sector Allocation: Bond market sectors tend to move in a cyclical fashion relative to the economy and display strong mean-reversion tendencies. These movements can be predictable and are utilized to produce potential alpha. INCORE Capital’s typical sector allocation includes governments, agencies, investment grade and high yield corporate bonds, mortgages, CMBS, asset-backed and municipal securities.
Security Selection: INCORE believes that independent, comprehensive analysis of issuers, securities, and cash flows leads to superior risk-adjusted returns. The team uses both quantitative and fundamental analysis to find relative value amongst issuers with stable to improving credit fundamentals while avoiding those with deteriorating fundamentals and downward ratings pressure.
Yield Curve Positioning: Movements in the level of interest rates and the shape of the yield curve are directly linked with economic cycles. INCORE believes movements are predictable and can be exploited to achieve superior risk-adjusted returns.