Active Long Duration
Fixed Income

Disciplined approach to fundamental research and bottom-up security selection

History

We have specialized in the management of long duration assets since 1975 – one of the longest records in the fixed income business.

We begin with an in depth discussion with the client of their investment goals and risk tolerance in order to establish the proper benchmark.  Our experience in long duration includes a wide range of both market benchmarks and customized solutions.  We utilize long duration market benchmarks with the correct characteristics when appropriate or create a custom blend of market benchmarks to better reflect the client’s needs.  Additionally, we have extensive experience creating custom benchmarks based upon liabilities.

Examples include but are not limited to:

Government/Credit Related Indices:

  • Bloomberg Barclays US Long Government/Credit Bond Index
  • Bloomberg Barclays US Long Government/Credit A+ Bond Index
  • Bloomberg Barclays US Long Government/Corporate Bond Index
  • 60% Bloomberg Barclays US Long Credit Bond Index / 40% Bloomberg Barclays US Treasury STRIPS 15+ Year Index
  • 70% Bloomberg Barclays US Long Credit Bond Index / 30% Bloomberg Barclays US Long Government Bond Index
  • 70% Bloomberg Barclays US Long Corporate Bond Index / 30% Bloomberg Barclays US Long Government Bond Index
  • 75% Bloomberg Barclays US Long Credit Bond Index / 25% Bloomberg Barclays US Long Government Bond Index
  • 75% Bloomberg Barclays US Long Corporate Bond Index / 25% Bloomberg Barclays US Long Government Bond Index
  • 50% Bloomberg Barclays US Long Corporate A+ Bond Index / 13% Bloomberg Barclays US Long Baa Corporate Bond Index / 37% Bloomberg Barclays US Long Government Bond Index
  • 15% Bloomberg Barclays US 10-20 Year Treasury Bond Index / 10% Bloomberg Barclays US Long Government Bond Index / 35% Bloomberg Barclays US Long Credit Bond Index / 20% Bloomberg Barclays US Government/Credit 1-5 Year Bond Index / 20% Bloomberg Barclays US Government/Credit 5-10 Year Bond Index
  • 50% Bloomberg Barclays US Long Government/Credit Bond Index / 20% Bloomberg Barclays US Long Credit Bond Index / 15% Bloomberg Barclays US 10-20 Year Treasury Bond Index / 15% Bloomberg Barclays US Intermediate Government/Credit Bond Index
  • Custom Liability Driven Investment (LDI) Indices

Credit Related Indices:

  • Bloomberg Barclays US Long Credit Bond Index
  • Bloomberg Barclays US Long Credit A+ Bond Index
  • 67% Bloomberg Barclays US Long Credit Bond Index / 33% Bloomberg Barclays US Intermediate Credit Bond Index
  • 75% Bloomberg Barclays US Long Credit Bond Index / 25% Bloomberg Barclays US Long Government/Credit Bond Index
  • 80% Bloomberg Barclays US Long Corporate Bond Index / 2% Bloomberg Barclays US Long Treasury Bond Index / 18% Bloomberg Barclays US Intermediate Treasury Bond Index
  • 80% Bloomberg Barclays US Long Corporate Bond Index / 20% Bloomberg Barclays US Long Treasury Bond Index
  • 90% Bloomberg Barclays US Long Corporate Bond Index / 10% Bloomberg Barclays US Long Government Bond Index
  • 90% Bloomberg Barclays US Long Credit Bond Index / 10% Bloomberg Barclays US Long Government Bond Index
  • Bloomberg Barclays US Long Corporate Bond Index
  • Bloomberg Barclays US Long Corporate 2% Capped Bond Index
  • Bloomberg Barclays US Long Corporate A+ Bond Index
  • BofA Merrill Lynch 10+ Year AAA-A US Corporate 3% Constrained Index (C91C)

Government Indices:

  • Citigroup 20+ Year STRIPS Index
  • Bloomberg Barclays US STRIPS 20+ Year Index

Capital at Risk: Please remember that there are inherent risks involved with investing in the markets, and your investments may be worth more or less than your initial investment upon redemption. There is no guarantee that the investment managers’ objectives will be achieved. Professional money management is not suitable for all investors.


Philosophy

We believe that the primary risk in a defined benefit plan is the risk of underperforming the liabilities, not just the chance of having negative returns on assets. A portfolio of corporate bonds that matches the cash flows of the liabilities would help minimize the risk of underperforming the liabilities. However, we strongly believe in active management of fixed income portfolios as default risk can lead to significant divergence between the asset and liability performance.

We seek to generate alpha from a combination of security selection, yield curve management, sector rotation and active trading. We do not make duration bets; as a result portfolio duration will likely be within a ¼ year of the duration of the benchmark.


Process

We make decisions based on the attractiveness of individual securities. We are much more of a “bottom up” than “top down” firm and seek ways to take advantage of our ability to perform fundamental credit analysis and quantitative analysis of individual securities. Our tight-knit team is extremely responsive to market opportunities, both in terms of making timely decisions and in analyzing individual securities – we are not encumbered by a slow management process. Located in an open office environment, portfolio managers, sector managers and sector traders continuously discuss and analyze potential investment opportunities. As a result, there is a constant awareness of opportunities within and relative value among sectors and, importantly, with respect to yield curve shape.

All of our portfolios are managed on a team basis by our fixed income portfolio managers. Sector specialists generate ideas within their areas of expertise and then compare these to relative value in other market segments. The decision making process is consensus oriented with the team scrutinizing and challenging investment ideas across the sectors. We believe this close and constant interaction among our sector managers is a key competitive advantage allowing us to make faster and better cross-sector decisions.


Investment Team

Seven portfolio managers are responsible for managing active long government/credit fixed income accounts. We designate a lead portfolio manager and a back-up for each account. The lead manager is responsible for coordinating and implementing the team’s decisions for the individual accounts. The lead is also the key contact person for the client.

 

Meet the Team
This website is intended for Institutional and Professional Investors only. All investments involve risk, including the possible loss of capital.

Important Disclosures
Jennison Associates is a registered investment advisor and a Prudential Financial company. Jennison Associates LLC has not been licensed or registered to provide investment services in any jurisdiction outside the United States. Certain investment vehicles are distributed or offered through Prudential Investment Management Services LLC (also a Prudential Financial Company) or other affiliated entities. Additionally, vehicles may not be registered or available for investment in all jurisdictions.

This web site is not intended as an offer or solicitation with respect to the purchase or sale of any security or other financial instrument or any investment management services. It does not constitute investment advice, should not be used as the basis for any investment decision, and does not purport to provide any legal, tax or accounting advice. This is for informational and educational purposes only and should not be construed as investment advice or an offer or solicitation in respect of any products or services to any persons who are prohibited from receiving such information under the laws applicable to their place of citizenship, domicile or residence.

Please remember that there are inherent risks involved with investing in the markets, and your investments may be worth more or less than your initial investment upon redemption. There is no guarantee that the investment managers’ objectives will be achieved. Further, there is no assurance that any strategies, methods, sectors, or any investment programs herein were or will prove to be profitable, or that any investment recommendations or decisions we make in the future will be profitable for any investor or client. Professional money management is not suitable for all investors.

For visitors domiciled in Canada: Jennison Associates LLC ("Jennison") has its principal place of business in the United States and is not registered in Canada and relies on the international adviser registration exemption in NI 31‐103 and is limited to providing services to "permitted clients."

In Australia, Jennison Associates LLC ("Jennison") has authorized the issue of this material for use solely by wholesale clients as defined in the Corporations Act of 2001. A registered investment adviser regulated by the SEC, Jennison is exempt from the need to hold an Australian financial services license (AFSL) for financial services provided to Australian wholesale clients on certain conditions. Financial services provided by Jennison are regulated by the SEC under the laws and regulatory requirements of the United States, which are different from the laws applying in Australia.

In Hong Kong, information is presented by representatives of PGIM (Hong Kong) Limited, a regulated entity with the Securities and Futures Commission in Hong Kong to professional investors as defined in Part 1 of Schedule 1 of the Securities and Futures Ordinance.

In Singapore, information is issued by PGIM (Singapore) Pte. Ltd. (“PGIM Singapore”), a Singapore investment manager that is licensed as a capital markets service license holder by the Monetary Authority of Singapore and an exempt financial adviser. These materials are issued by PGIM Singapore for the general information of “institutional investors” pursuant to Section 304 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”) and “accredited investors” and other relevant persons in accordance with the conditions specified in Sections 305 of the SFA.

For information on other jurisdictions, please see our Terms and Conditions.

Links to third-party sites are intended for informational purposes only and should not be considered investment advice or recommendation to invest. These links do not constitute endorsement or confirm their accuracy, and we are not responsible for any third-party guidelines, security, or accuracy of information.