Strategy Spotlight
Why Western Asset’s fundamental value investing approach never goes out of style
About the strategy
Investing with Intention: Our US Core and Core Plus Strategies
Western Asset’s US Core and Core Plus fixed-income strategies are built based on the Firm’s long-standing fundamental value investing philosophy, and seek to outperform their relevant benchmarks while approximating benchmark risk. Driven by the extensive research and experience of Western Asset’s portfolio managers, these strategies have endured the test of time by staying true to their mandates while seeking to generate attractive income and total return for investors. Since 1971, Western Asset has managed risk and sought value in fixed-income through multiple business cycles and economic environments.
The Case for Western Asset's US Broad Market Strategies
Portfolio Manager John Bellows explains why Western Asset believes 2023 will be a year of opportunity for fixed-income investors. Following the difficult year of 2022, which saw declines in almost all risk assets, we expect 2023 will not only see a rebound for fixed-income, but it should also see fixed-income re-establish its traditional role of ballast against equities. Given our US Core and Core Plus strategies’ central tenets of value and diversification, we believe they are well positioned to take advantage of the current market environment for the benefit of our investors.
Insights: US Broad Market Update
As an active value manager, sometimes we find our positioning offsides. We have been in this position before and in each of those instances, we were able to recover and achieve new highs. We’re confident we can do that again.
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Key Convictions 4Q23
Learn more about Western Asset’s highest conviction views for fixed-income markets and opportunities, aggregated in an at-a-glance dashboard.
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A History of Resilience Over Time: US Core and Core Plus
Western Asset has carefully managed risk and sought value in fixed-income by adhering to our long-held principles and time-tested processes that have enabled us to weather rocky markets and come out stronger on the other side—all for the benefit of our clients. Read More
US Core and Core Plus Key Features
- OUR APPROACH
- INVESTMENT OBJECTIVES
- STRATEGY PROFILES
These strategies aim to deliver returns through active investment in a high-quality US Core fixed-income portfolio with opportunistic investments in high-yield, non-US bonds and emerging market debt.
- Team-Based, Time-Tested
For over 50 years, our active management process that relies on fundamental value investing has persevered across many market cycles despite periods of drawdown. - Long-Term Focus
The strategies have withstood the test of time across many market cycles by tapping into multiple drivers of returns designed to cushion volatility. - Rigorous Risk Management Process
The strategies benefit from our in-depth risk mitigation process, which includes robust communication and escalation procedures, to help best match with client risk tolerances.
Western Asset Core Bond Strategy seeks to maximize total return from a high-quality, US-dollar-denominated Core fixed-income portfolio. Historically, the Core strategy has exceeded its benchmark return by 75 basis points annually over the course of a market cycle while approximating benchmark risk.
Western Asset Core Plus Bond Strategy seeks to maximize total return from a high-quality, US domestic core fixed-income portfolio that can be enhanced by allocations to sectors such as high-yield, non-US and emerging market debt. Historically, the Core Plus strategy has exceeded the benchmark return by 150 basis points annually over the course of a market cycle while approximating benchmark risk.
Western Asset investment strategy profiles include overviews, objectives, performance, risk information and more.
Western Asset Core Bond Strategy Western Asset Core Plus Bond StrategyMeet the Western Asset Team
We employ a team-based approach to navigating fixed-income markets around the globe; all investment decisions are thoroughly debated by Western Asset’s deep bench of investment professionals.
- Over 50 years of history dedicated to fixed-income investing
- Fixed-income manager with $388.9 billion AUM*
- 123 investment professionals with an average of 25 years of investment experience
*As of December 31, 2023
The value of investments and the income from them may go down as well as up and you may not get back the amount you originally invested.
Investment Risks
The strategy does not offer any capital guarantee or protection and you may not get back the amount invested. The strategy is subject to the following risks which are materially relevant but may not be adequately captured by the indicator:
Asset-Backed Securities:The timing and size of the cash-flow from asset-backed securities is not fully assured and could result in loss for the strategy. These types of investments may also be difficult for the strategy to sell quickly.
Bonds: There is a risk that issuers of bonds held by the strategy may not be able to repay the investment or pay the interest due on it, leading to losses for the strategy. Bond values are affected by the market’s view of the above risk, and by changes in interest rates and inflation.
Counterparties: The strategy may suffer losses if the parties that it trades with cannot meet their financial obligations.
Credit: The risk that a issuer will be unable to pay principal and interest when due. Derivatives: The strategy makes significant use of derivatives. The use of derivatives can result in greater fluctuations of the portfolio's value.
Emerging Markets: The strategy may invest in the markets of countries which are smaller, less developed and regulated, and more volatile than the markets of more developed countries.
Inflation: The value of bonds held by the strategy that are intended to protect against inflation may be negatively affected by changes in interest rates.
Interest Rates: Changes in interest rates may negatively affect the value of the strategy. Typically as interest rates rise, bond values fall.
Liquidity: In certain circ*mstances it may be difficult to sell the strategy’s investments because there may not be enough demand for them in the markets, in which case the strategy may not be able to minimize a loss on such investments.
Mortgage-Backed Securities: The timing and size of the cash-flow from mortgage-backed securities is not fully assured and could result in loss for the strategy. These types of investments may also be difficult for the strategy to sell quickly.
