USING TECHNOLOGY TO BUILD BETTER PORTFOLIOS In this information-rich age, it is crucial to combine cutting-edge technological tools with the hands-on expertise of the investment team in order to identify the best investment opportunities for our portfolios. SANTA (“Structuring Analysis and Trading Assistant”) is a proprietary tool we developed to guide our allocation decisions. Once our research team has identified opportunities based on credit fundamentals, our execution and structuring teams use SANTA to evaluate and identify the most attractive security to invest in. SANTA allows us to sift through the bond universe and find mispriced securities quickly and efficiently.
Example: European Banks and Barclays Bank PLC
The Credit Research Team, working in conjunction with the Portfolio Execution Team, believed the European banking sector was priced attractively for the risk profile. European bank balance sheets have improved in quality given the health of corporate and consumer exposures, and many of these institutions have also demonstrated prudent risk and capital management. These improving fundamentals were not reflected in credit spreads, which in many cases, were at stressed levels. Each portfolio has a certain target weight for sector exposure based on what is reflected in credit spreads. When our team identifies an attractive opportunity through inefficiencies in the market, we manually override the target weight for the relevant sector.
We leverage an enriched dataset with cutting- edge technologies in the portfolio management lifecycle: from aggregated trade idea generation to best execution via real-time liquidity discovery, and from portfolio structuring via mandate-specific optimization to robust and sophisticated risk management. The focus is always to make our investment process more efficient and optimized so that portfolio managers can make decisions based on the most timely and accurate information, which is especially important in a volatile market environment. - Ray Cao, Portfolio Manager
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