Investment Management

Unconstrained Fixed Income

Summary

This multi-sector strategy seeks attractive returns by investing in the broad global fixed income universe without regard to a benchmark. The strategy takes a flexible and unconstrained approach to both duration and sector allocation to achieve a return target across diverse market environments. Voya combines its macro theme analysis with disciplined research and relative value analysis to identify unrecognized value investment opportunities and produce consistent results.

Objective

The objective is to outperform LIBOR by 3-4% with an annualized absolute volatility of 2-7% over a full credit cycle.*

Process

Our investment process involves a focus on macro themes, which are incorporated in every aspect of the decision making process. We integrate quantitative and fundamental analysis at the center of the disciplined, bottom-up security selection approach. Feedback loops across all teams ensure that all elements are continuously connected. Strong risk budgeting, risk management and compliance capabilities ensure quality checks and balances. Ultimately, we seek consistent competitive returns appropriate to each client’s mandate and risk tolerance.

Competitive Advantage

  • Unconstrained approach to portfolio construction employed in an intelligently designed, risk aware manner. Not unconstrained risk
  • Absolute return goals with a focus on downside risk mitigation through all markets
  • Maintains an appropriate mix of duration and credit exposure that is constantly monitored and adjusted as market conditions change
  • Acute sensitivity to changing market correlations and risk drivers informed by deep understanding of global macro environment
  • A deep and experienced team of over 150 fixed income specialists with exceptional performance track records across strategies

Principal Risks

The principal risks are generally those attributable to bond investing. Holdings are subject to market, issuer, credit, prepayment, extension, and other risks, and their values may fluctuate. Market risk is the risk that securities may decline in value due to factors affecting the securities markets or particular industries. Issuer risk is the risk that the value of a security may decline for reasons specific to the issuer, such as changes in its financial condition. The strategy may invest in mortgage-related securities, which can be paid off early if the borrowers on the underlying mortgages pay off their mortgages sooner than scheduled. If interest rates are falling, the strategy will be forced to reinvest this money at lower yields. Conversely, if interest rates are rising, the expected principal payments will slow, thereby locking in the coupon rate at below market levels and extending the security’s life and duration while reducing its market value. High yield bonds carry particular market risks and may experience greater volatility in market value than investment grade bonds. Foreign investments could be riskier than U.S. investments because of exchange rate, political, economics, liquidity, and regulatory risks. Additionally, investments in emerging market countries are riskier than other foreign investments because the political and economic systems in emerging market countries are less stable.

*There is no guarantee that this objective will be achieved.

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