Strategy that seeks excess returns through country, maturity, credit, and currency selection. Out-of-benchmark sectors are strictly used to increase security selection breadth, while still targeting the credit and duration profile of the benchmark, and so does not seek to engage in duration timing or sector selection.

Seeks excess returns through maturity, and currency selection across hard currency and local currency markets. While the strategy includes local currency investments, it takes no beta to local currency debt, engages in no overall duration or spread timing, and targets a beta of one to its hard currency benchmark.

A disciplined methodology underlies everything we do. Our investment process, built over 20 years, is based on a continuous process of design, refine, test, repeat. In portfolio construction, risk management and trading, we seek additional value for our clients. Using both qualitative and quantitative tools, we’re meticulous in every detail of the investment process.

Harvesting a broad set of return sources, far broader than the typical set that relies heavily on the equity risk premium. Implementing a series of portfolio management methods we label “alpha in portfolio construction.” Putting in place the risk control necessary to see this approach, or any other, through tough times. "No single idea will do the trick," they wrote, "but each of these can help investors get closer to the 5% real-return target."

Institutional investors commonly target 5% real annual returns, or 7% to 8% nominal returns. At the time this paper was written, however, the authors estimated the prospective real yield on a 60/40 portfolio — 60% equities and 40% fixed income — was less than half that: 2.4%, the lowest in 112 years. Thus, they asserted, traditional allocations were unlikely to achieve 5% real returns in the following 5 to 10 years.

The standard universe of “alternative asset classes” was not likely to fill the gap, they said, because it tends to repeat the problem of concentration in equity risk, just at a higher fee. Despite all of this, the authors said they believe that some investors can still achieve the 5% goal, or at least come closer to it, if they embrace a modest amount of innovation and thoroughly prepare themselves to see it through. Broadly, they recommend: