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Investment Process & Strategy

Our Management Process

At DUCENTA SQUARED, we understand that the global landscape offers opportunities not only to invest but also to establish future relationships between all our stakeholders.  Our years of experience have taught us to always make your organization's interests our priority.

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Approach

The Ducenta Squared Asset Management platform builds upon more than 30 years of track record in fixed income investing. We seek to provide investors stable long-term returns and generate strong and consistent excess returns against the benchmark by actively managing the drivers of performance - sector/industry rotation, credit selection and duration/yield curve.

Investment Philosophy

Our investment philosophy is rooted in fundamental credit analysis, a strong risk management framework and a culture of collaboration.  Our emphasis on liquidity enables us to position portfolios in anticipation of market cycles, thereby capturing investment opportunities throughout its various stages. Our disciplined risk control with an emphasis on downside protection has helped produce sound performance through cycles.

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Investment Process

Our top-down, bottom-up, repeatable investment process has been refined over and over throughout decades of direct investment experience across multiple market and economic cycles. The Investment Policy and Strategy Committee drives the top-down process by setting portfolio parameters based on macroeconomic fundamentals, relative value assessments, and supply and demand technicals. Portfolio managers develop industry strategy, targeting relative value opportunities and collaborating with our research analysts who provide bottom-up fundamental analysis.  The analysts provide detailed credit analysis focusing on a company’s business model, financials, management team, and corporate structure.

Our investment Strategy

Core Strategy

 

The Core Strategy is a long-only investment grade fixed income strategy benchmarked against a broad market index such as the Bloomberg Barclays U.S. Aggregate Index. The strategy invests in securities assigned ratings within the first four rating tiers (all investment grade) with no maturity restrictions. Typical investments can include but are not limited to US treasury and agency securities, corporate bonds, mortgage-backed securities, asset-backed securities, commercial-mortgage backed securities, preferred, and money-market instruments. The strategy seeks to add consistent excess returns over a full market cycle by capturing relative value between fixed income sectors, security selection, and duration management.  The team employs a disciplined risk management process at all times.
* Strategy available for both institutional and high net worth clients
** Customization of sectors, ratings, maturity, and SRI screening available

Core Plus Strategy

 

The Core Plus Strategy is a long-only strategy invested in fixed income securities, including high yield, and is benchmarked against a broad market index such as the Bloomberg Barclays U.S. Aggregate Index. The strategy invests in securities across the ratings spectrum, investment grade and high yield, with no maturity restrictions. Typical investments can include but are not limited to US treasury and agency securities, corporate bonds, mortgage-backed securities, asset-backed securities, commercial-mortgage backed securities, preferred, and money-market instruments.  The strategy may also invest in leveraged loans and in non-dollar denominated securities. The strategy seeks to add consistent excess returns over a full market cycle by capturing relative value between fixed income sectors, security selection, and duration management.  The team employs a disciplined risk management process at all times.
* Strategy available for both institutional and high net worth clients. 
** Customization of sectors, ratings, maturity, and SRI screening available

High Yield Strategy

 

The High Yield Strategy is a long-only strategy that invests primarily in below investment grade corporate bonds (and leveraged loans where applicable) and is benchmarked against a BB/B High Yield Index.  The high yield strategy primarily utilizes the higher quality tiers (BB and B) of the investment universe in an attempt to maximize returns in rising markets while preserving client principal in down markets.  Certain client portfolios may also invest in split-rated B/CCC credits opportunistically. Tactical allocations into higher quality securities are employed during periods of stress in the credit cycle or when valuations no longer compensate appropriately for market risks. The strategy seeks to add consistent excess returns over a full market cycle by combining a methodical top-down economic analysis that establishes the credit quality of the portfolio and industry positioning with rigorous bottom-up security selection. 

The team employs a disciplined risk management process at all times.
* Strategy available for both institutional and high net worth clients
** Customization of sectors, ratings, maturity, and SRI screening available

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Investment Process & Strategy