Prudential Fixed Income offers institutional investors client-centered solutions across the fixed income markets, with a focus on credit strategies and liability-driven investing. We manage $543 billion* in assets with portfolio management and research teams located in Newark, New Jersey (U.S.) and affiliated offices in London and Singapore. 
Broad Market Strategies
Core Conservative — Benchmark-focused, investment grade bond strategy that seeks an excess return over the Barclays U.S. Aggregate Bond Index or similar benchmark. Strategy has historically generated virtually all of its excess return from bottom-up subsector and security selection, with top-down decisions such as duration, yield curve, and sector positioning tightly constrained to benchmark weightings at all times.
Core/Core Plus — Actively managed Core and Core Plus strategies that seek an excess return over the Barclays U.S. Aggregate Bond Index or similar benchmark. Core strategy is investment grade-focused and seeks to generate its excess return from fairly equal increments of both sector allocation and subsector/security allocation. Duration and yield curve positioning have not historically been primary sources of excess return. Core Plus strategy seeks to generate approximately half of its excess return from sector allocation, and up to one-third each from subsector/security selection and duration/ yield curve/currency positioning, depending on market conditions. Actively allocates to both benchmark and non-benchmark sectors, with heavy emphasis on the credit-oriented sectors.
Global Core/Global Aggregate Plus — Actively managed strategies that seeks an excess return over the Barclays Global Aggregate Bond Index or similar benchmark. Global Core Strategy actively emphasizes U.S. and European corporate bonds, seeking to generate a majority of excess return from sector allocation as well as individual security selection and industry rotation within the global corporate sector. Allocates to both benchmark and non-benchmark sectors. Global Aggregate Plus Strategy seeks to maximize excess return opportunities from a diversified set of sustainable sources—sector allocation, subsector and security selection, duration/curve and country selection, and currency management. Strategy seeks to generate approximately half of its excess return from sector allocation and one-third from subsector/security selection.
Absolute Return — Actively managed strategy that seeks to maximize absolute risk-adjusted return over ML 3-Month LIBOR Index. Strategy focuses on relative-value based sector allocation, research-based subsector and security selection, and duration, yield curve, and currency management across fixed income sectors and currencies, favoring the credit-oriented sectors. Portfolio positioning at any given time is based on where we believe the most attractive risk-adjusted values lie across the investable universe. Strategy is designed to provide flexibility to respond to changing market opportunities to both generate alpha and to mitigate downside risk.
Investment Grade Credit Strategies
U.S. Investment Grade Corporate — Actively managed, research-driven U.S. corporate credit strategy targeting an excess return over the Barclays U.S. Credit Index or similar benchmark. Strategy has historically generated the majority of its excess return from individual security selection, with remaining excess return generated through industry allocation. Strategy actively overweights/underweights industries and issuers based on both top-down economic assessment as well as bottom-up fundamentals. Active relative value trading seeks to add further value.
Global Corporate — Actively managed, research-driven global corporate strategy targeting an excess return over the Barclays Global Aggregate Corporate Bond Index. Strategy emphasizes U.S. and European corporate bonds, seeking to generate a majority of excess return from regional allocation, individual security selection, and industry rotation primarily based on bottom-up fundamentals. A top down element influences country views, credit biases, and overall risk.
Leveraged Finance Strategies
High Yield — Highly diversified, research-driven strategy targeting an excess return over a broad market High Yield Bond Index or similar benchmark. Strategy emphasizes the higher quality segment of the high yield market—BB- and B-rated corporate bonds—with heavy emphasis on default avoidance. Strategy seeks to generate two-thirds of its excess return from individual security selection and one-third from industry allocation. This strategy can be managed in a U.S. European, or Global mandate.
Bank Loans — Actively managed, research-driven strategy targeting an excess return over a leveraged loan index or similar benchmark. Strategy seeks to generate excess return through industry and security selection, with heavy emphasis on default avoidance. Opportunities are sourced from both primary and secondary markets. Strategy can be managed in a U.S. European or Global mandate.
CLOs — CLO management is an important business of Prudential Fixed Income and a natural outgrowth of our expertise in global credit and in structured transactions. We have experience managing CLO assets across a broad range of sectors, including U.S. and European bank loans, high yield bonds, investment grade corporate bonds, and asset-backed securities, and within both cash and synthetic structures.
Emerging Market Strategies
Hard Currency — Actively managed, research driven strategy targeting excess return over the JPM EMBI Global Diversified Index. Strategy invests in hard currency sovereigns and quasi-sovereigns with opportunistic allocations to hard currency corporates, local rates, and FX. Strategy seeks to generate 40% of its excess return from country selection, 40% from security selection, and 20% from opportunistic positioning.
Hard/Local Blend — Actively managed, research driven strategy targeting excess return over a blend of JPM EMBI Global Diversified GBI-EM Global Diversified. Strategy invests 50% in hard currency sovereigns and quasi-sovereigns and 50% in local rates and FX with opportunistic allocations to hard currency corporates. Strategy seeks to generate 40% of its excess return from country selection, 40% from security selection, and 20% from opportunistic positioning.
Local Currency — Actively managed, research driven strategy targeting excess return over the JPM GBI EM Global Diversified Index. Strategy invests in local currency sovereigns and FX with opportunistic allocations to hard currency corporates, sovereigns, and quasi-sovereigns. Strategy seeks to generate 45% of its excess return from FX, 30% from country selection, and 25% from security selection.
U.S. Long Duration Strategies
Long Government/Credit — Actively managed long duration strategy targeting an excess return over the Barclays U.S. Long Government/Credit Index or similar benchmark. Strategy has historically generated its excess return in equal increments of top-down sector allocation and bottom-up subsector and security selection, with an emphasis on the credit and spread sectors.
Long Duration Corporate — Actively managed long duration strategy targeting an excess return over the Barclays U.S. Long Corporate Bond Index or similar benchmark. Strategy has historically generated the majority of its excess return from individual security selection and subsector/industry rotation.
Long Duration LDI — Actively managed long duration strategy targeting an excess return over a custom benchmark we develop that reflects client liabilities. Most portfolios are composed predominately of investment grade corporate bonds, but also include U.S. Government and Agency and structured product securities. Since the objective in each Long Duration Custom portfolio is to match the client’s specific liabilities while generating some alpha, the strategy typically targets portfolio duration equal to benchmark duration to minimize tracking error.
Alternative Strategies
U.S. Liquidity Relative Value — Actively managed strategy that seeks to maximize total return on a risk-adjusted basis by investing in relative value opportunities within sectors of the U.S. fixed income market that are considered to be liquid. Designed to have no correlation with major beta sources. In managing this strategy, Prudential Fixed Income employs six sub-strategies, including Treasury Optimal, Treasury Relative Value, Mortgage-Backed Securities Relative Value, Swap Relative Value, Futures Relative Value, and Spread Trading.
Emerging Market Long/Short — Actively managed strategy that seeks to maximize total return in excess of 3 Month LIBOR on a risk-adjusted basis by utilizing multiple strategies primarily within the emerging markets debt sector and investing primarily in sovereign, quasi-sovereign and corporate bonds of emerging market issuers in hard and local currencies. In managing this strategy, Prudential Fixed Income employs three trading strategies, including country-specific trades, relative value or pairs trades, and carry trades.
*As of December 31, 2014
There is no guarantee that these objectives will be achieved.
