The strategy seeks to achieve the benchmark return while preserving value and managing risk. We replicate the overall risk characteristics of the benchmark, while seeking to minimize tracking error volatility and the performance drag from transaction costs. Portfolio managers use a stratified sampling approach to match the important risk characteristics of the index, including duration, quality/rating, sector and convexity. Portfolio managers use a proprietary credit model to inform their sampling process and control portfolio risk. The credit model provides a systematic framework for evaluating exposure to corporate issuers by seeking to identify potential bonds that are more likely to underperform or potentially be downgraded.
Please note that all investment strategies involve risk. There is no guarantee that the stated investment objectives will be met.
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.