Reams Asset Management has managed fixed income assets since the firm’s inception in 1981. Currently, we manage fixed income products with the following style emphasis: core plus, core, intermediate, long duration, low duration, ultra low duration and unconstrained.
Reams’ core plus record dates back to the founding of the firm, while the other products were introduced more recently. All core plus, core, intermediate, long duration, low duration and ultra low duration portfolios are based on the same philosophy and process, so we are able to focus our efforts on essentially one model portfolio subject to various constraints (e.g. maturity, quality), rather than managing different products utilizing a variety of approaches.
Reams manages an unconstrained product whose goal is to identify and evaluate relative value opportunities in all sectors of the fixed income market and select the “best ideas” for use in unconstrained portfolios.
Volatility is a key driver of performance in the fixed income market. It is usually higher than commonly perceived and often mispriced in the marketplace. This core belief leads us to:
- Focus on long-term value and “total return”.
- Employ macro and bottom-up strategies to uncover unique opportunities.
- React opportunistically to valuation discrepancies and volatility in the bond market.
Reams’ investment process combines active duration management with bottom-up issue selection, focusing on undervalued sectors of the fixed income market. Duration strategy is based on a model in which current inflation-adjusted interest rates are evaluated relative to historical norms. Bottom-up issue selection is based on a scenario analysis to identify which bonds might perform best under possible interest rate and credit scenarios. The investment team then compares investment opportunities and the portfolio is assembled from what we perceive to be the best values.
The same investment philosophy and process is applied to all Reams products; however, within each product, based on the product’s investment objective and benchmark, there will be variations such as duration, quality and sector decisions.