Gary Herbert, portfolio manager at Legg Mason subsidiary Brandywine Global, explains his multi-sector approach to achieving value across different bond segments
For several years asset managers and advisers have been grappling with an unfavourable interest rate policy which has resulted in yields declining across the asset class, while credit spreads have also diminished.
In this environment investors have been more exposed to interest rate sensitivity and the challenge for managers has been how to maintain a decent level of income in a low-yielding environment.
"What we've been advocating," says Gary Herbert, who is Head of Global Credit at Brandywine, "is a more multi-sector approach to defining value."
Herbert manages the Legg Mason IF Brandywine Global Income Optimiser Fund, an unconstrained strategic bond fund which seeks to provide an attractive income while preserving capital by investing actively across a range of global fixed income sectors.
"When a manager is good at identifying opportunities on a top-down and bottom-up basis they can deliver more yield than higher quality sovereigns, but with lower risk than the most risky segments of the fixed income markets such as emerging markets or high yield."
"So we're big advocates of a global multi-sector approach because this allows us the flexibility to determine where there is value across different segments of the market."
Click here to read more about the Legg Mason IF Brandywine Global Income Optimiser fund and how the manager assembles a diversified portfolio with a global multi-sector approach.