European Aggregate Core Strategy
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The investment team believes that market participants may often mis-value a company’s default risk, resulting in bond prices that fail to reflect the true credit profile of a company. However, the team believes that the market will re-value the bond prices of high-quality issuers based over time, thereby offering investors the opportunity to potentially exploit these pricing inefficiencies and earn superior returns over the long term. The team believes that successful credit management depends on four factors:
- A value-driven process
- Forward-looking credit analysis
- Broad diversification to help reduce portfolio risk
- A global approach
Combined Quantitative and Qualitative Approach |
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The team’s investment approach integrates strong qualitative analysis with robust quantitative valuation tools at every stage of the investment process, providing a robust credit management process. |
Extensive Experience |
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The Global Fixed Income Team at Morgan Stanley Investment Management has invested in fixed income assets since 1975, and in European fixed income assets since 1990. |
Global Research: |
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An emphasis on a team-based approach to research and investment, allows investors to benefit from the combined insight and expertise of the Global Fixed Income Team of 60 investment professionals. Approximately 80% of Morgan Stanley Investment Management’s research is generated in-house, and this is supplemented by Morgan Stanley sell-side and 3rd party research. |
| 1 | Macro Analysis |
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The process begins with a top-down value assessment of the bond universe, including a consideration of macroeconomic conditions, the corporate earnings environment and relative valuations. |
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| 2 | Screening |
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The team applies what they believe to be a unique combination of quantitative and qualitative filters to identify bond issuers that meet its investment criteria in terms of competitive position, franchise value and management quality. |
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| 3 | Credit Analysis |
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The team conduct rigorous credit analysis and focus on financial risk, business risk and management ability/intentions. |
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| 4 | Valuation Analysis |
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The team conducts a relative valuation assessment to help determine a bond's over/undervaluation. |
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| 5 | Portfolio Construction: |
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A portfolio based on specific client guidelines is constructed, with sector allocation driven primarily from bottom-up security selection (subject to our risk management guidelines). |
Effective May 27, 2022, Richard Class has stepped down as a Portfolio Manager for the Strategy, and Anton Heese was added as a Portfolio Manager.
Effective 30 August 2024, Richard Ford is no longer serving as Portfolio Manager, and Anton Heese and Dipen Patel were added as Portfolio Managers on the Portfolio.