Fixed Income Capability
SSgA’s Fixed Income strategies seek to either match or exceed relevant benchmark returns by capturing excess returns overlooked or unattainable by less robust methodologies, without exposing the portfolio to unnecessary risk. Our Fixed Income Group employs both quantitative and qualitative methods to meet client-mandated portfolio goals and objectives. Backed by the strength and resources of State Street’s global organization, we are a recognized industry leader in developing and utilizing advanced portfolio management techniques and technologies to monitor, minimize, and control portfolio risk.
Our Process
Our Solutions
Our People
Our Process
SSgA integrates a portfolio process with a combination of powerful analytical tools, proprietary models, cutting-edge technology and a synergistic team approach that fosters creativity and collaboration. The sum of these resources permits us to develop a powerful, flexible expected risk/return framework for fixed income portfolios. Traditional fundamental and technical analyses are also utilized to arrive at investment decisions that can be broadly characterized as being based on maturity structure, sector weightings and security selection.

Individual securities are selected for purchase or sale based on criteria established by the appropriate credit and research areas, the relative price at which the securities can be bought or sold, and our analyses of their impact on the portfolio’s risk control guidelines.

 
Our Solutions
SSgA offers three primary strategies for fixed income opportunities: Passive, Core, and Global.

We have extensive experience in meeting the opportunities and challenges of the U.S. bond markets through passive strategies. The cornerstone of these solutions is stratified sampling -- building portfolios with the same characteristics as the chosen index, using fundamental credit analysis and quantitative portfolio construction techniques. Sampling is utilized because of the large number of securities in the Lehman Brothers Aggregate Bond Index and its components, and because many of these securities are simply not available for outright purchase.

The objective of our passive strategies is to match the total return of the benchmark while minimizing tracking error. For these strategies, the annual guideline for maximum total tracking error is 20 basis points, with the expected annualized tracking error being between zero and ten basis points, depending upon the benchmark.

With our Core strategies, we know that dependable and predictable opportunities exist within the various sectors of the U.S. fixed income market and we believe that our clients look for these attributes from the Fixed Income component of their broader asset allocation. The objective of our U.S. core active bond strategy to add consistent returns above those of the index while maintaining an Information Ratio of greater than 0.7. Our objective is to outperform the index in three out of four quarters, with a target of 50 to 75 basis points of excess return over the benchmark on an annualized basis over an interest rate cycle.

Rapid growth in the size and complexity of global bond markets creates substantial opportunities for the experienced, risk-conscious investor. Our Global Fixed Income solution has an alpha target of 1% with an expected 1.25-1.45%. This process aims to add value by exploiting a broad range of investment grade fixed income strategies within the global rates, global credit, ABS and MBS sectors.

 
Our People
With nine investment centers worldwide, we have a truly global dedicated portfolio management team focused on a wide array of fixed income strategies. The typical portfolio manager has more than a decade of industry experience and holds an MBA and/or CFA. This team approach has been successfully deployed across all product areas, a move prompted by the increased complexity and specialization of fixed income asset management.
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