AAM's disciplined Four Stage Investment Process begins with a thorough understanding of a client's unique operating environment and constraints. This includes an understanding of each client's liabilities, tax status, financial ratios, rating agency and regulatory concerns, growth projections, as well as the degree of client management's risk tolerance.

The portfolio management teams integrate the critical inputs from the client analysis with our bottom-up investment methodology. The portfolio construction begins within a strict risk management framework. The duration of the portfolio is managed within a narrow range to a client’s target, and there is an emphasis on diversification across sectors and issuers. Generally, AAM portfolios tend to favor sectors and securities that offer to stable to improving credit ratings trends while mitigating high volatility sectors of the corporate bond market and the negative convexity of Mortgage Backed Securities (MBS) and callable Agencies.

AAM client portfolios tend to underweight Treasuries and Agency securities in favor of higher yielding, high credit quality Asset Backed Securities (ABS), Commercial Mortgage Backed Securities (CMBS), and Taxable Municipal Securities.

Security selection is a primary driver of AAM’s excess returns. The research and trading professionals combine fundamental research, as well as quantitative and technical analysis, with their extensive industry experience to identify attractive relative value opportunities across the fixed income sectors. The security selection process can be adapted to suit the needs of yield-oriented clients, such as Life companies, or total return mandates as part of a Core Bond or Cross-Over strategy.

Portfolio performance will be measured relative to an individual client's objectives. For clients with total rate of return objectives, performance attribution versus a benchmark index will be calculated. AAM provides clients with all the reports needed to properly analyze the effectiveness of their investment strategy. All of these reports are available online through a secure client access portal.