Enhanced Core

Discipline

Our investment process begins with a top-down assessment of the climate for risk and the outlook for the economy. Next, our macro views are shaped by interest-rate and economic trends, broad emerging themes, investor risk appetite, and general market tone. Our Investment Team is further dedicated to five key dimensions of risk that we believe impacts all fixed income portfolios: interest rates, curves, volatility, credit and global or currency. An analysis of return expectations and portfolio position recommendations evolves from this process. Active sector rotation, which is the activity that stems from our top-down approach, is an important element in our Enhanced Core portfolios. Security selection represents the bottom-up element of our overall investment process for Enhanced Core s portfolios. Finally, it is also important when outlining our investment process to highlight our firm’s deep commitment to risk management in all of our fixed income portfolios.

The Investment Team utilizes a rigorously applied sell discipline. A bond becomes a sell candidate when it becomes "fully priced" due to narrowing yield spreads, adverse trends in credit quality or certain supply/demand factors.