Atlanta Capital High Quality Short Duration 1-3 Year

Overview
Investment Approach
Investment Professionals

Overview

Strategy Facts

Capability:
Strategy Inception:	January 1992
Benchmark:	ICE BofA 1-3 Year Government

Strategy Facts

Capability:
Strategy Inception:	January 1992
Benchmark:	ICE BofA 1-3 Year Government

Summary

The High Quality Short Duration 1-3 Year strategy seeks to invest in high quality, low-volatility alternatives to low-yielding money market and government debentures. We primarily target short-term securitized bonds (1-3 years) that we believe to be of the highest quality with low credit and event risk. The team seeks to preserve principal and generate a consistent source of income and liquidity. Traditional short-term, low volatility mortgage- and asset-backed securities are emphasized because of their historical substantial yield premium versus Treasury and agency notes.

Investment Approach

Philosophy

We invest in high quality securitized bonds with stable and predictable cash flows and low credit and event risk. These types of securities can produce consistent returns and preserve capital during times of capital market uncertainty. We seek to deliver capital preservation, liquidity in all market conditions, and attractive risk-adjusted returns.

Differentiators

Security Selection

We specialize in high quality securitized investing, including traditional, low volatility ABS and Agency MBS backed by single- and multi-family loans. Our approach focuses on identifying securitized bonds with stable and predictable cash flows and low credit and event risk.

Sector Emphasis

We exclude corporate bonds from all short duration strategies. Instead, we emphasize high quality securitized bonds because they offer similar yields as corporate bonds with significantly higher credit quality.

Results of Our Process

We seek to provide capital preservation, liquidity in all market conditions, and deliver attractive risk adjusted returns by outperforming our benchmark over time with less risk.

Investment Process

1	Our Strategy:
	Emphasize expected low-volatility securitized debt to enhance yield potential Focus on issue selection and yield curve management Exclude corporate bonds due to credit & event risk Manage risk in terms of the relative safety of principal
2	Our Objective:
	To seek higher return alternatives to lower yielding money market funds and government debentures To obtain income and credit stability through high quality securitized debt instruments Seek to provide liquidity in all market conditions

Investment Professionals

Jim Womack, CFA

Managing Director

30 years industry experience

Brad Buie, CFA

Executive Director

31 years industry experience

Kyle Johns, CFA

Executive Director

17 years industry experience

RISK CONSIDERATIONS

Investing involves risk, including possible loss of principal. Diversification does not eliminate the risk of loss. The value of investments may increase or decrease in response to economic and financial events (whether real, expected or perceived) in the U.S. and global markets. developments. Investments rated below Investment Grade (typically referred to as “junk”) are generally subject to greater price volatility and illiquidity than higher rated investments. Credit Risk: Investments in income securities may be affected by changes in the creditworthiness of the issuer and are subject to the risk of non-payment of principal and interest. The value of income securities also may decline because of real or perceived concerns about the issuer’s ability to make principal and interest payments. Duration Risk: Securities with longer durations tend to be more sensitive to interest rate changes than securities with shorter durations. Government Agency Risk: While certain U.S. Government sponsored agencies may be chartered or sponsored by acts of Congress, their securities are neither issued nor guaranteed by the U.S. Treasury. Income Market Risk: An imbalance in supply and demand in the income market may result in valuation uncertainties and greater volatility, less liquidity, widening credit spreads and a lack of price transparency in the market. Interest Rate Risk: As interest rates rise, the value of certain income investments is likely to decline. Maturity Risk: Longer-term bonds typically are more sensitive to interest rate changes than shorter-term bonds. Prepayment Risk: Mortgage-backed securities are subject to prepayment risk.

There is no guarantee that any investment strategy will work under all market conditions, and each investor should evaluate their ability to invest for the long-term, especially during periods of downturn in the market.

A separately managed account may not be appropriate for all investors. Separate accounts managed according to the Strategy include a number of securities and will not necessarily track the performance of any index. Please consider the investment objectives, risks and fees of the Strategy carefully before investing. A minimum asset level is required.

For important information about the investment managers, please refer to Form ADV Part 2.

The views and opinions and/or analysis expressed are those of the author or the investment team as of the date of preparation of this material and are subject to change at any time without notice due to market or economic conditions and may not necessarily come to pass. Furthermore, the views will not be updated or otherwise revised to reflect information that subsequently becomes available or circumstances existing, or changes occurring, after the date of publication. The views expressed do not reflect the opinions of all investment personnel at Morgan Stanley Investment Management (MSIM) and its subsidiaries and affiliates (collectively “the Firm”), and may not be reflected in all the strategies and products that the Firm offers.

OTHER CONSIDERATIONS

The indexes are unmanaged and do not include any expenses, fees or sales charges. It is not possible to invest directly in an index. Any index referred to herein is the intellectual property (including registered trademarks) of the applicable licensor. Any product based on an index is in no way sponsored, endorsed, sold or promoted by the applicable licensor and it shall not have any liability with respect thereto.

The ICE BofA 1-3 Year Government Index is an index that includes securities in the Government Index with a maturity from one up to (but not including) three years. The 1-3 Year Government Index includes Treasuries (i.e., public obligations of the U.S. Treasury) and agencies (i.e., publicly issued debt of U.S. Government agencies, quasi-federal corporations, and corporate or foreign debt guaranteed by the U.S. Government).

The information presented represents how the portfolio management team generally implements its investment process under normal market conditions.

Atlanta Capital is part of Morgan Stanley Investment Management. Morgan Stanley Investment Management is the asset management division of Morgan Stanley.