Investment Grade Fixed Income
We believe each insurance client is inherently unique and requires a customized investment strategy that matches its liability profile. AAM’s investment grade fixed income strategy offers insurers a diversified investment grade portfolio that emphasizes stable income, predictable cash flows and stable credit ratings with the goal of generating consistent excess returns relative to the market.
Our strategy incorporates top-down and bottom-up inputs into a relative value framework for identifying sector weightings and specific security recommendations. Recognizing the income needs of our insurance clients, AAM will typically underweight Treasuries and agencies in favor of other high quality sectors that offer incremental yield, such as corporate bonds, Mortgage Backed Securities (MBS), Collateralized Mortgage Obligations (CMOs), taxable municipals and seasoned Commercial Mortgage Backed Securities (CMBS).
AAM does not make interest rate bets in our client portfolios because we do not believe that this is a sustainable source of excess returns. As a result, the duration of the portfolio is targeted to either the portfolio’s benchmark index or a predetermined actuarial metric. Our trading and research analysts have a long-term investment horizon, so we are able to limit portfolio turnover and mitigate tax issues associated with realizing gains and losses.