Fixed Income Strategy
Fixed Income Strategies
Actively managed short-term strategies focused on capital preservation and liquidity
Broad sector exposure with an emphasis on high-quality, investment-grade securities
Custom-built portfolios designed to meet specific cash flow, duration, and return needs
Objective
The Payden Enhanced Cash and Low Duration strategies seek to manage short-maturity fixed income portfolios by pursuing enhanced risk-adjusted return potential relative to cash-oriented objectives, while maintaining a strong focus on capital preservation and liquidity. Portfolios are actively managed across high-quality sectors, including investment-grade corporates, securitized products, and government securities, with duration profiles tailored to client-specific guidelines.
These strategies are built to serve as core allocations for short-duration objectives or as tactical cash solutions, with the flexibility to adapt to shifting interest rate environments, credit conditions, and institutional liquidity needs.
Where Philosophy Meets Execution
We approach short-duration investing with the view that limited maturity does not require limited opportunity. We take an active, risk-aware approach that aims to generate incremental return over cash alternatives by combining macroeconomic insight, sector-level research, and precise portfolio construction.
The investment process integrates top-down inputs from our Investment Policy Committee with bottom-up security selection across high-quality sectors, including corporates, ABS, MBS, and Treasuries. Duration, spread duration, and weighted average life are all calibrated to client-specific targets.
Structured products are used not only for spread enhancement but also as diversifiers relative to traditional credit. Floating-rate securities help manage interest rate risk without sacrificing income. Each holding is evaluated for liquidity, credit quality, and its role in the broader portfolio.
Risk is managed at multiple levels, with defined portfolio guidelines, tight tolerance bands, and daily oversight. The result is a portfolio that remains responsive to changing markets while staying grounded in the needs of the investor.
Investment in foreign securities entails certain risks from investing in domestic securities, including changes in exchange rates, political changes, differences in reporting standards, and, for emerging market securities, higher volatility. Investing in high-yield securities entails certain risks from investing in investment grade securities, including higher volatility, greater credit risk, and the issues’ more speculative nature. The value of fixed income portfolios will rise and fall due to changes in interest rates and other economic factors. Investment portfolios could lose principal.
Actively managed short-term strategies focused on capital preservation and liquidity
Broad sector exposure with an emphasis on high-quality, investment-grade securities
Custom-built portfolios designed to meet specific cash flow, duration, and return needs
Objective
The Payden Enhanced Cash and Low Duration strategies seek to manage short-maturity fixed income portfolios by pursuing enhanced risk-adjusted return potential relative to cash-oriented objectives, while maintaining a strong focus on capital preservation and liquidity. Portfolios are actively managed across high-quality sectors, including investment-grade corporates, securitized products, and government securities, with duration profiles tailored to client-specific guidelines.
These strategies are built to serve as core allocations for short-duration objectives or as tactical cash solutions, with the flexibility to adapt to shifting interest rate environments, credit conditions, and institutional liquidity needs.
Where Philosophy Meets Execution
We approach short-duration investing with the view that limited maturity does not require limited opportunity. We take an active, risk-aware approach that aims to generate incremental return over cash alternatives by combining macroeconomic insight, sector-level research, and precise portfolio construction.
The investment process integrates top-down inputs from our Investment Policy Committee with bottom-up security selection across high-quality sectors, including corporates, ABS, MBS, and Treasuries. Duration, spread duration, and weighted average life are all calibrated to client-specific targets.
Structured products are used not only for spread enhancement but also as diversifiers relative to traditional credit. Floating-rate securities help manage interest rate risk without sacrificing income. Each holding is evaluated for liquidity, credit quality, and its role in the broader portfolio.
Risk is managed at multiple levels, with defined portfolio guidelines, tight tolerance bands, and daily oversight. The result is a portfolio that remains responsive to changing markets while staying grounded in the needs of the investor.
Investment in foreign securities entails certain risks from investing in domestic securities, including changes in exchange rates, political changes, differences in reporting standards, and, for emerging market securities, higher volatility. Investing in high-yield securities entails certain risks from investing in investment grade securities, including higher volatility, greater credit risk, and the issues’ more speculative nature. The value of fixed income portfolios will rise and fall due to changes in interest rates and other economic factors. Investment portfolios could lose principal.
Global Fixed Income Strategy
Global Short/Intermediate Fixed Income Strategy
Actively managed global bond strategy across sovereigns, corporates, securitized debt, and currencies
Diversified exposure to developed and emerging markets in both local and hard currency
Built for total return, global diversification, and customized risk profiles
Objective
The Global Fixed Income Strategy is designed to deliver long-term total return and global diversification through an actively managed portfolio of high-quality bonds. The strategy invests across sovereign, corporate, and securitized debt from both developed and emerging markets, with flexibility to allocate across currencies, sectors, and regions.
With hedged or unhedged options, it aligns with a variety of investor objectives—whether targeting income, managing global interest rate risk, or expanding beyond domestic exposure. The strategy typically maintains an intermediate-to-long duration profile and emphasizes investment-grade credit quality, making it suitable for institutions seeking stable, risk-aware global exposure.
Where Philosophy Meets Execution
We believe that successful global fixed income investing requires both breadth and discipline. That’s why our approach combines top-down macro views with bottom-up security selection, backed by an experienced global research platform and trading execution across time zones.
Every portfolio begins with a clear understanding of the investor’s goals. From there, we construct allocations across sovereigns, supranationals, agencies, corporates, and structured sectors—with decisions driven by real-time views on growth, inflation, central bank policy, and relative value. We assess both fundamental and technical indicators to guide regional and currency positioning, while maintaining a strong quality bias.
The strategy’s broad mandate allows us to pursue value across the curve, including opportunities in local currency debt, credit dislocations, or relative value in global spread products. Hedging is employed strategically depending on client preferences and market conditions, offering an additional tool for risk control.
Ongoing oversight includes daily risk monitoring, duration and curve management, and active rebalancing as macro dynamics evolve. The result is a dynamic, risk-aware strategy designed to capture global opportunities while maintaining clarity and control at multiple levels of the portfolio.
Actively managed short-term strategies focused on capital preservation and liquidity
Broad sector exposure with an emphasis on high-quality, investment-grade securities
Custom-built portfolios designed to meet specific cash flow, duration, and return needs
Objective
The Payden Enhanced Cash and Low Duration strategies are designed to optimize short-maturity fixed income portfolios by targeting higher risk-adjusted returns than traditional cash equivalents, while maintaining a strong focus on capital preservation and liquidity. Portfolios are actively managed across high-quality sectors, including investment-grade corporates, securitized products, and government securities, with duration profiles tailored to client-specific guidelines.
These strategies are built to serve as core allocations for short-duration objectives or as tactical cash solutions, with the flexibility to adapt to shifting interest rate environments, credit conditions, and institutional liquidity needs.
Where Philosophy Meets Execution
We approach short-duration investing with the view that limited maturity does not require limited opportunity. We take an active, risk-aware approach that aims to generate incremental return over cash alternatives by combining macroeconomic insight, sector-level research, and precise portfolio construction.
The investment process integrates top-down inputs from our Investment Policy Committee with bottom-up security selection across high-quality sectors, including corporates, ABS, MBS, and Treasuries. Duration, spread duration, and weighted average life are all calibrated to client-specific targets.
Structured products are used not only for spread enhancement but also as diversifiers relative to traditional credit. Floating-rate securities help manage interest rate risk without sacrificing income. Each holding is evaluated for liquidity, credit quality, and its role in the broader portfolio.
Risk is managed at multiple levels, with defined portfolio guidelines, tight tolerance bands, and daily oversight. The result is a portfolio that remains responsive to changing markets while staying grounded in the needs of the investor.
Investment in foreign securities entails certain risks from investing in domestic securities, including changes in exchange rates, political changes, differences in reporting standards, and, for emerging market securities, higher volatility. Investing in high-yield securities entails certain risks from investing in investment grade securities, including higher volatility, greater credit risk, and the issues’ more speculative nature. The value of fixed income portfolios will rise and fall due to changes in interest rates and other economic factors. Investment portfolios could lose principal.
Access to sovereign, corporate, and local currency EM debt across 90+ countries
Active country, credit, and currency selection based on macro and fundamental insights
Strategies tailored to risk tolerance, duration, and client objectives
Objective
Payden’s Emerging Market Bond strategies are designed to provide long-term income and capital appreciation by investing across sovereign, corporate, and local currency debt markets in emerging economies. With a globally diversified opportunity set spanning approximately to 90 countries, the strategies combine top-down macroeconomic analysis with bottom-up credit and country research to identify value and manage risk.
Each strategy, whether focused on hard currency sovereigns, corporates, local markets, or a blend, aims to deliver strong absolute and risk-adjusted returns, supported by a rigorous investment process, thorough risk management and disciplined diversification. Customization for duration, credit quality, and ESG considerations allows alignment with a wide range of investor objectives.
Where Philosophy Meets Execution
At Payden, we believe emerging markets offer one of the most compelling and underutilized sources of return in global fixed income. But capturing that potential requires more than passive exposure. It requires deep research, real-world insight, and disciplined risk control across countries, currencies, and credits.
Investing in EM countries requires a nuanced and distinct approach relative to other markets. For us, this means always starting with the country view. As such, it is essential to develop a holistic understanding of each country, in order to evaluate its overall trajectory. Our fundamental assessments are always forward looking.
Our approach starts with macro-level views on global growth, inflation, and capital flows. These provide a framework for regional and country-level perspectives through direct research, including on-the-ground engagement in Latin America, Asia, Europe, Africa, and the Middle East. For sovereigns, we evaluate economic policy, political dynamics and institutional credibility. For corporates, we assess credit metrics, governance, and sector outlook, always factoring in the country view.
With a history in EM dating back to the 1990s, our team brings experience and consistency to every portfolio. We construct strategies that can serve as standalone allocations or complement broader fixed income exposure, offering income and diversification, with proper risk control.
Investment in foreign securities entails certain risks from investing in domestic securities, including changes in exchange rates, political changes, differences in reporting standards, and, for emerging market securities, higher volatility. Investing in high-yield securities entails certain risks from investing in investment grade securities, including higher volatility, greater credit risk, and the issues’ more speculative nature. The value of fixed income portfolios will rise and fall due to changes in interest rates and other economic factors. Investment portfolios could lose principal.
100% government-backed portfolio with no corporate credit exposure
Short to intermediate duration focused on income with lower volatility
Designed for capital preservation, liquidity, and principal stability
Objective
The Payden U.S. Government Bond Strategy is built to deliver high credit quality, predictable income, and reduced volatility through exclusive exposure to U.S. government-backed securities. With a short to intermediate duration profile and an emphasis on Treasuries, agency debentures, and agency mortgages, the strategy is designed for institutions seeking a transparent, low-risk core fixed income allocation that minimizes credit risk and interest rate sensitivity.
Where Philosophy Meets Execution
When safety, liquidity, and clarity matter most, we take a disciplined approach to building portfolios that stay true to their mandate. This strategy is composed entirely of securities backed by the U.S. government or its agencies, providing maximum credit quality and eliminating exposure to corporate risk.
Portfolio construction begins with a macro-informed view of rates and duration but stays grounded in the conservative objectives of capital preservation and income generation. The strategy targets securities with a one- to five-year duration, positioning in the most stable part of the yield curve while maintaining enough flexibility to seek incremental yield.
We continuously monitor interest rate dynamics, reinvestment risks, and liquidity conditions. Holdings are selected for their structure, pricing, and policy-driven characteristics, ensuring the portfolio delivers on its role as a reliable, lower-volatility anchor within broader fixed income allocations.
Investment in foreign securities entails certain risks from investing in domestic securities, including changes in exchange rates, political changes, differences in reporting standards, and, for emerging market securities, higher volatility. Investing in high-yield securities entails certain risks from investing in investment grade securities, including higher volatility, greater credit risk, and the issues’ more speculative nature. The value of fixed income portfolios will rise and fall due to changes in interest rates and other economic factors. Investment portfolios could lose principal.
Invests primarily in GNMA securities backed by the full faith and credit of the U.S. government
Actively managed portfolio that prioritizes liquidity, diversification, and no credit risk
Built around a rigorous investment process that aims to mitigate prepayment risk
Objective
The Payden GNMA Fund seeks to deliver stable income and capital preservation through a diversified portfolio of U.S. government-guaranteed mortgage-backed securities. The strategy emphasizes bonds backed by Ginnie Mae (GNMA), offering investors explicit government credit support and attractive yield relative to other high-quality fixed income assets. The fund targets securities with favorable prepayment profiles and structural characteristics, with a focus on long-term value across market cycles.
Where Philosophy Meets Execution
The GNMA Fund is managed with the belief that mortgage-backed securities, even when government-guaranteed, require deep analysis and active oversight. At Payden, our process begins with top-down macro views—rates, housing trends, volatility—and combines them with granular, loan-level analysis of mortgage pools.
We evaluate every security for structure, prepayment behavior, seasoning, loan characteristics, and geographic dispersion. Specified pools are prioritized for their ability to mitigate prepayment and extension risk, and scenario testing is applied to ensure resilience under a range of interest rate environments.
Risk is managed across multiple dimensions: duration, convexity, liquidity, and pool quality. The portfolio is constructed to optimize income and stability, with tactical allocations to adjustable-rate, seasoned, and non-generic pools based on real-time market dynamics.
This hands-on, data-driven approach helps ensure the portfolio fulfills its role as a high-quality, income-generating anchor in institutional fixed income allocations.
Investment in foreign securities entails certain risks from investing in domestic securities, including changes in exchange rates, political changes, differences in reporting standards, and, for emerging market securities, higher volatility. Investing in high-yield securities entails certain risks from investing in investment grade securities, including higher volatility, greater credit risk, and the issues’ more speculative nature. The value of fixed income portfolios will rise and fall due to changes in interest rates and other economic factors. Investment portfolios could lose principal.
Actively managed municipal portfolios optimized for after-tax performance
Considers tax-exempt and taxable bonds to optimize after-tax yield, performance, and liquidity
Credit-focused approach avoids landmines and identifies durable value
Objective
The Tax-Advantaged strategy seeks to deliver superior after-tax total returns through active management of municipal and taxable fixed-income securities. By combining traditional tax-exempt bonds with selective allocations to taxable municipals, U.S. Treasuries, and other high-grade sectors, the strategy aims to enhance income, manage risk, and preserve capital while remaining flexible enough to adapt to evolving tax policies, market dislocations, and investor-specific mandates.
Where Philosophy Meets Execution
Payden’s tax-advantaged investing philosophy rests on three key beliefs: Tax-exempt is not always optimal, municipal markets are inherently inefficient, and alpha can be earned through active management.
We begin with macro views on rates, credit cycles, and policy, which inform how we position aggregate duration and credit quality across portfolios. From there, a bottom-up credit process drives security selection, integrating proprietary research, third-party data, and on-the-ground experience to assess risks and spot opportunities others overlook.
Our approach is multi-sector and pragmatic. We rotate between tax-exempt and taxable municipals based on after-tax yield comparisons and performance expectations, sector spreads, and market technicals. We also incorporate disciplined risk sizing, liquidity screens, and active gain/loss harvesting. The result is a flexible strategy that delivers income and risk-adjusted performance without compromising credit quality, transparency, or tax efficiency.
Investment in foreign securities entails certain risks from investing in domestic securities, including changes in exchange rates, political changes, differences in reporting standards, and, for emerging market securities, higher volatility. Investing in high-yield securities entails certain risks from investing in investment grade securities, including higher volatility, greater credit risk, and the issues’ more speculative nature. The value of fixed income portfolios will rise and fall due to changes in interest rates and other economic factors. Investment portfolios could lose principal.
Actively managed portfolios addressing the full ratings spectrum within securitized bonds
Broad Exposure across RMBS, CMBS, ABS, and CLOs, targeting sectors with strong credit fundamentals
Bottom-up and top-down investment process built for diversification, yield, and risk-adjusted returns
Objective
Payden’s Securitized Income Strategy seeks to capitalize on inefficiencies within the $14 trillion U.S. securitized bond market by constructing portfolios of primarily investment-grade securities with strong collateral structures and credit fundamentals, tailored to meet client return objectives. The strategy targets attractive income and risk-adjusted returns by allocating across a broad opportunity set, including residential and commercial mortgage-backed securities, asset-backed securities, and collateralized loan obligations.
With low correlation benefits to traditional fixed income and naturally diversifying credit exposure, the strategy is well-positioned to complement core bond allocations or stand alone as a differentiated fixed income solution.
Where Philosophy Meets Execution
Securitized investing requires depth of knowledge, discipline, and precision. At Payden, we approach the space through both a macroeconomic and bottom-up, security level lens. The Investment Policy Committee sets a firmwide view on interest rates, economic growth, and inflation, while the dedicated securitized team evaluates the fundamental and technical implications of these macro themes across RMBS, CMBS, ABS, and CLO sectors.
Our investment process is layered and rigorous. We combine bottom-up analysis of counterparties, collateral and structure with top-down assessment of bond technicals, including spread dynamics, relative value, and liquidity conditions. Each security is evaluated using our credit-structure-price framework, and portfolios are constructed using a “home base” approach that balances duration, credit quality, and spread contribution within client parameters.
Position sizing is deliberate and varies by tranche rating and collateral type, while risk management incorporates both spread duration targets and diversification limits at the sector and issuer level. Ongoing surveillance ensures portfolios adapt to evolving credit, rate, and liquidity environments, with the goal of delivering consistent income and capital preservation across market cycles.
Investment in foreign securities entails certain risks from investing in domestic securities, including changes in exchange rates, political changes, differences in reporting standards, and, for emerging market securities, higher volatility. Investing in high-yield securities entails certain risks from investing in investment grade securities, including higher volatility, greater credit risk, and the issues’ more speculative nature. The value of fixed income portfolios will rise and fall due to changes in interest rates and other economic factors. Investment portfolios could lose principal.
Multi-sector bond strategy built to adapt as markets shift
Focus on income and capital preservation with moderate duration
Actively managed using Corporate, Securitized, Emerging Market, and Government Bonds
Objective
The Strategic Income Strategy is designed to provide consistent income and long-term capital preservation through a flexible, actively managed fixed income portfolio. With access to a wide range of sectors, including investment-grade and high-yield corporates, structured credit, emerging markets, and government bonds, the strategy seeks to capture opportunities across market cycles while maintaining a focus on quality and risk control.
Where Philosophy Meets Execution
At Payden, we believe strategic income investing is about thoughtful risk-taking, not simply reaching for yield. The process starts with a clear view of the macroeconomic landscape, including growth trends, inflation expectations, and policy direction. These views are shaped by our Investment Policy Committee and guide sector tilts and interest rate positioning across the portfolio.
From there, our sector teams dig into credit and structural fundamentals, evaluating corporate bonds, securitized assets, and emerging markets for relative value, liquidity, and credit quality. Sector rotation plays a central role. The team continuously evaluates where spreads offer the best compensation for risk, with roughly half of the portfolio’s performance typically tied to these allocation shifts. The rest is driven by bottom-up bond selection, interest rate strategies, and curve positioning.
Security selection reflects our strongest convictions. We favor bonds with identifiable catalysts for spread compression or income durability and size positions based on liquidity and risk-adjusted return. Each segment of the portfolio—whether investment-grade credit, high yield, securitized, or emerging markets—is selected for its specific role in return generation and diversification.
Risk is monitored continuously through attribution analysis, scenario testing, and performance oversight. The strategy is designed to adapt to market volatility, with the flexibility to lean in when opportunities arise or pull back when caution is warranted. This is credit investing built for real-world conditions, not theory.
Investment in foreign securities entails certain risks from investing in domestic securities, including changes in exchange rates, political changes, differences in reporting standards, and, for emerging market securities, higher volatility. Investing in high-yield securities entails certain risks from investing in investment grade securities, including higher volatility, greater credit risk, and the issues’ more speculative nature. The value of fixed income portfolios will rise and fall due to changes in interest rates and other economic factors. Investment portfolios could lose principal.
Actively managed core bond strategy focused on income and capital preservation
Broad exposure across high-quality sectors with selective use of opportunistic assets
Disciplined risk management rooted in macro insights and daily oversight
Objective
The Payden Core Bond Strategy is built to serve as a foundational anchor in a diversified fixed income allocation. Its purpose is to deliver dependable long-term income while actively managing interest rate and credit risk. By drawing from a broad range of high-quality sectors and maintaining flexibility across the yield curve, the strategy seeks to outperform traditional benchmarks with measured consistency.
This strategy is for institutional investors who want more than just index exposure. It’s a solution designed to meet evolving market conditions with clear-eyed discipline, aiming to add value through active decision-making rather than passive participation.
Where Philosophy Meets Execution
At Payden, we believe fixed income portfolios should be built on purpose, not simply follow an index. That starts with understanding the role a portfolio plays and managing it with intention, transparency, and control.
Our process combines macroeconomic insights with bottom-up sector expertise. The Investment Policy Committee develops directional views based on global fundamentals. Sector teams evaluate relative value across investment-grade opportunities including Treasuries, agency mortgages, corporates, and securitized credit. Opportunistic exposures, such as high yield or emerging markets, may be included when appropriate and consistent with client guidelines.
Portfolios are structured using a template-based approach that promotes consistency across accounts with similar mandates. Dedicated traders handle execution, reviewing each trade for liquidity, market impact, and portfolio fit. Daily monitoring, exception reporting, and tolerance bands help ensure alignment with benchmarks and client-specific requirements.
Risk management is embedded throughout the process. It informs position sizing, liquidity planning, and performance evaluation. The result is a flexible and measured approach that adapts to changing markets while staying grounded in its core objective.
Investment in foreign securities entails certain risks from investing in domestic securities, including changes in exchange rates, political changes, differences in reporting standards, and, for emerging market securities, higher volatility. Investing in high-yield securities entails certain risks from investing in investment grade securities, including higher volatility, greater credit risk, and the issues’ more speculative nature. The value of fixed income portfolios will rise and fall due to changes in interest rates and other economic factors. Investment portfolios could lose principal.
Actively managed portfolios focused on investing primarily in investment grade corporate bonds
Designed to enhance yield and total return potential while maintaining high credit quality
Security selection and sector allocation driven by fundamental research and top-down macro views
Objective
Payden’s Investment Grade Corporate Strategy is designed for investors seeking enhanced income and total return potential through a dedicated corporate bond allocation. The strategy focuses primarily on investing in U.S. dollar-denominated, investment grade issuers and draws on both top-down macroeconomic views and bottom-up fundamental credit research. It also has the flexibility to invest in other asset classes, including high yield bonds, emerging market debt, municipal bonds, and securitized products, which are used for diversification purposes and to increase total return potential.
Portfolios are actively managed with a disciplined approach to issuer selection, sector allocation, and duration positioning, all while maintaining a strong emphasis on liquidity and risk control.
Where Philosophy Meets Execution
Corporate bond markets offer a deep and dynamic opportunity set, but unlocking value requires a deep understanding of the underlying credit market from both a fundamental and technical perspective. At Payden, our approach begins with a forward-looking view on rates, credit conditions, and macroeconomic trends. From there, sector specialists apply rigorous credit analysis to evaluate relative value, capital structure positioning, and issuer fundamentals.
The strategy is built around investment grade corporate credit, emphasizing diversification across industries, issuers, and maturities. Portfolios are constructed with the goal of producing attractive risk-adjusted returns relative to its benchmark over a market cycle, while managing downside risk through careful sizing, ongoing monitoring, and scenario analysis.
We structure portfolios with intent. Credit selection and issuer weightings, sector allocation, and yield curve positioning are all tailored to client guidelines and market conditions. Daily oversight, performance attribution, and compliance checks support a transparent, risk-aware process focused on long-term results.
Investment in foreign securities entails certain risks from investing in domestic securities, including changes in exchange rates, political changes, differences in reporting standards, and, for emerging market securities, higher volatility. Investing in high-yield securities entails certain risks from investing in investment grade securities, including higher volatility, greater credit risk, and the issues’ more speculative nature. The value of fixed income portfolios will rise and fall due to changes in interest rates and other economic factors. Investment portfolios could lose principal.
Designed to deliver consistent outperformance with a benchmark-aware, no-surprises risk profile
Focused on income generation through fundamental credit and relative value analysis
Position sizing based on bottom up risk-adjusted conviction, not macro predictions
Objective
The Payden High Yield Strategy seeks to generate attractive total returns through income and capital appreciation while improving diversification within traditional fixed income or equity allocations. The strategy is built to add value relative to the benchmark across credit cycles through fundamental credit research, relative value analysis, and disciplined portfolio construction.
With a modest tracking error and a focus on delivering a strong information ratio over time, the strategy aims to provide consistent results and a no-surprises risk profile. It is well suited for institutional asset allocators seeking stable high yield exposure with a strong emphasis on outperformance across market environments.
Where Philosophy Meets Execution
We believe long-term high yield performance is driven by yield and security selection—not market timing. That’s why our strategy is grounded in fundamental credit analysis and relative value, not macro forecasts that can be difficult to time or rely on.
We size positions based on risk-adjusted conviction, liquidity, and contribution to overall portfolio behavior. The strategy avoids concentrated risk and aims to generate more yield than the benchmark over time. Our size is a structural advantage. We can trade efficiently, adjust exposures as our views evolve, and remain nimble when credit markets shift. Combined with daily oversight and scenario-based risk testing, the result is a strategy that offers consistency, transparency, and value-add without surprises.
Investment in foreign securities entails certain risks from investing in domestic securities, including changes in exchange rates, political changes, differences in reporting standards, and, for emerging market securities, higher volatility. Investing in high-yield securities entails certain risks from investing in investment grade securities, including higher volatility, greater credit risk, and the issues’ more speculative nature. The value of fixed income portfolios will rise and fall due to changes in interest rates and other economic factors. Investment portfolios could lose principal.
Designed to align portfolio duration with long-term institutional liabilities
High-quality, long-duration bond exposure with active sector and curve positioning
Custom solutions using cash bonds, derivatives, and risk-aware tracking
Objective
The Long Duration Strategy is designed to help institutional investors meet long-term obligations by aligning asset portfolios with liability cash flows and duration profiles. Whether the objective is surplus management, liability immunization, or long-duration total return, the strategy offers flexibility across public and private plan structures.
The strategy emphasizes high credit quality and long-dated securities, with the ability to incorporate futures, swaps, and modest high yield allocations to enhance duration control and income potential. Whether benchmarked to a standard index or a plan-specific liability stream, the strategy is precision-driven, risk-aware, and tailored for institutional success.
Where Philosophy Meets Execution
Long-duration investing isn’t just about extending maturities—it’s about precision. At Payden, we approach LDI mandates with a singular focus: aligning portfolio characteristics with future obligations in both time and risk structure.
Our process begins with a deep understanding of each client’s liability profile, whether that’s a pension fund’s actuarial curve or an insurance portfolio’s regulatory capital charge. From there, we construct portfolios using high-quality long-duration assets—Treasuries, agency debt, investment-grade corporates, and mortgages—selected for their ability to match cash flows and maintain liquidity.
We actively manage duration and curve exposure, using interest rate swaps and Treasury futures when necessary to fine-tune alignment with long-dated liabilities. While the foundation remains investment-grade, we may introduce a modest allocation to high yield to improve income potential and broaden diversification—but only when it fits the overall liability-matching framework.
Risk is calibrated across all dimensions: credit, curve, liquidity, and performance tracking. Oversight is continuous, and portfolios are built to stay in sync with client objectives, whether benchmarked to a broad index or a bespoke liability stream. The result is a durable, high-conviction strategy for institutions managing the long view.
Investment in foreign securities entails certain risks from investing in domestic securities, including changes in exchange rates, political changes, differences in reporting standards, and, for emerging market securities, higher volatility. Investing in high-yield securities entails certain risks from investing in investment grade securities, including higher volatility, greater credit risk, and the issues’ more speculative nature. The value of fixed income portfolios will rise and fall due to changes in interest rates and other economic factors. Investment portfolios could lose principal.
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