The managers invest with flexibility across the fixed income spectrum and the blending of assets in the fund is adjusted according to their views on the prevailing market conditions and valuations. The broader fixed interest team undertakes fundamental macro-economic and credit research. At the macro level, regional teams establish firm-wide central, best and worst case scenarios. In terms of credit analysis, initial screens are used to assess factors such as liquidity and business model complexity. Issuers that pass through to the next stage undergo detailed analysis, culminating in an internal credit score. In determining relative value, return forecasts and downside risks are established for countries while for credits, fair value targets are determined on the basis of various factors, including company fundamentals, sovereign risk and liquidity.

The managers combine these broad inputs with their own market views. To aid portfolio construction, they maintain a list of market-driving themes that are important for shaping the portfolio and determining the preferred asset allocation split between government, investment grade and high yield bonds. Potential buy candidates are those where their perception of valuation differs from the market, whilst taking into consideration price volatility. Derivative strategies are deployed actively for hedging and for achieving market exposures, particularly in expressing tactical views in both credit and duration.