Our perspective on global micro event and strategies.
As a solutions portfolio manager on the Alternative Market Premia Strategies Team, Carlos has fiduciary responsibility managing client portfolios across multi-manager and outcome-oriented investment solutions. He is responsible for designing, developing, and applying portfolio management and risk management in these portfolios. He also conducts research on risk factors, investment themes, and customized hedging strategies, and allocates client capital as suitable for each unique client objective using the team's proprietary risk framework. He works across investment teams, Trading, Product Management, and Portfolio Services to develop optimal trade constructions to minimize impact to client portfolios and mitigate investment, regulatory, and operational risks.
The short answer is no. While it’s a legitimate question (and one we’ve gotten quite accustomed to hearing), the reality is that both equity and fixed income market participants are often drawn to “cheap” assets by the allure of enhanced excess return potential. Here is some of my team’s latest thinking on value investing and why we think it’s relevant in credit markets.
For years, many fixed income investors have adhered to pretty loose definitions of what constitutes an overvalued (“expensive”) or undervalued (“cheap”) credit asset, typically based on whether its option-adjusted-spread is wide or tight versus a given risk-free asset (e.g., US Treasuries).
Our investment framework goes a step further with a more nuanced approach to the notion of “value” in corporate credit markets. We follow a…