Emerging Market Debt

Philosophy

Our investment philosophy is centered upon our pursuit of consistent, superior rates of return with low volatility. We are value-oriented investors seeking to own undervalued sectors, securities and currencies. We use our substantial experience and product expertise to constantly assess "relative value" among all sectors of the bond markets. Our duration is kept within narrow bands around the benchmark to minimize, volatility. Currency management focuses on analyzing potential for capital appreciation, while minimizing the risk inherent in currency exposure.

Discipline

Portfolio managers are responsible for asset allocation, individual security selection and use their own research in addition to the quantitative and fundamental research provided by our dedicated research staff. In each sector, there are specific disciplines used to identify value. Bond markets and currencies are analyzed quantitatively to assess the return potential and relative value within the universe. The firms' active management of the yield curve allows for adding value by investing in those sectors of the curve that are "undervalued" and avoiding those that are "overvalued," based on our modeling and expectations for the economic, monetary, fiscal and political environment in the future. Securities may be opportunistically purchased from extended sectors such as corporates, mortgages, and below investment-grade. The security selection process includes intensive credit analysis, total return analysis/projections, liquidity appraisal and a fundamental outlook for each issuer. Separately, currencies are assessed based on quantitative, fundamentally-based valuation models.

Our portfolio managers have the flexibility to buy and sell individual issues, especially within their sphere of expertise. Our team of experienced traders assists in setting price targets for buys and sells.