As one of the world’s largest fixed-income asset managers, with nearly 200 investment professionals globally, DWS is positioned to help investors capitalize on market opportunities.
Our fixed income platform features a legacy built on shared knowledge and expertise developed over nearly a century of asset management experience. Across the globe, sometimes in untapped niches, our team of investment professionals guide clients in every major fixed income sector.
Our process features two distinct principles:
DWS offers investors access to a variety of fixed-income opportunities through an international platform that features a deep set of country, regional and global capabilities across the multi-sector spectrum.
Investment approach
Backed by nearly a century of experience, DWS has a legacy of developing customized bond investment programs based on every investor’s unique objectives and constraints. Strategy designs often address a wide range of objectives, including concerns such as income generation, liquidity, gain/loss management, optimization, and liability funding.
The breadth of our core investment team enables market access and allocation across the investment-grade spectrum. Sector expertise includes credit, MBS, CMOs, CMBS, RMBS, ABS, CLOs, taxable municipal bonds, U.S. Governments, and cash.
Core Plus portfolios start with a quantitative strategic asset allocation approach to non-core asset classes, with regular portfolio adjustments driven by tactical asset allocation conclusions informed by DWS’ CIO Office. Security selection is driven by sector research, portfolio management and trading expertise across areas such as high yield bonds and bank loans, non-investment grade CLOs, emerging market credit, infrastructure debt, esoteric structured finance, and COCOs.
Investment approach
With a focus on capital preservation and liquidity, value is added through a variety of sources but mainly from security selection and sector allocation, but can also include yield curve and duration exposure, among securities in the one-to three-year range. Customization is a key attribute and given our size and footprint, we interact and maintain relationships with custodian banks all over the world. Exposure typically spans a number of fixed income instruments such as U.S. Treasuries, global sovereigns, Agencies, corporate bonds, securitized debt, MBS and CMOs, and currencies.
Investment approach
Customized insurance fixed income is a core capability. Based on an insurer’s investment guidelines, defined goals and company parameters, our team is prepared to design and implement bespoke portfolios based on specific, desired outcomes. Portfolio construction can be strategic, tactical or both, and along with our historical understanding of insurance accounting and regulations, can provide insurance-appropriate reporting around trade management, risk analytics, and portfolio projections.
DWS’s sector teams have the ability to be active contributors to a multi-sector portfolio but also manage bespoke strategies in their respective areas of the market.
Investment approach
We proudly maintain a fundamental approach to credit research. Backed by theoretical and empirical pedigree, our process utilizes rigorous bottom-up company analysis. We seek to achieve consistent, competitive total returns by investing in a diversified portfolio of U.S. corporate bonds.
Diversification is achieved through careful credit and sector market segmentation. From a credit perspective, allocations can be made based on desired beta, quality and curve positioning. Other factors include financial, industrial and utility sector economic outlooks.
Strategy features
Investment approach - High Yield
When using a bottom-up research process, we consider fundamental security selection as the main factor contributing to performance. We believe the high-yield market is not fully efficient due to its complexity, illiquidity and lack of transparency. Therefore, we look for companies with the ability to generate cash flow, and in particular free cash flow. We subject each credit to stress tests and create pro-forma financials to potentially identify both upside and downside challenges and opportunities.
Strategy features
Investment approach - Bank Loans
Rigorous fundamental credit analysis is the foundation in minimizing defaults and avoiding downside risk.
Strategy features
Investment approach - Structured Finance
Structured finance product strategies includes a variety of specialized asset types. Typical structures often include Commercial Mortgage-backed Securities (CMBS), Asset-backed Securities (ABS), Collateralized Loan Obligations (CLOs), and Non-agency Residential-backed Securities (RMBS), either as allocation in a broader portfolio or as individual sub-sector exposure.
We use a three-pronged approach to analyze structured finance transactions—assets, associated parties and structural mechanics.
Strategy features
Investment approach - Mortgage-backed Securities & Rates
A relative-value philosophy is utilized when assessing MBS transactions. Security selection, coupon and sector rotation, and scenario analysis are a typical sources of investment income and excess returns. Analyst evaluate MBS investment attractiveness based on a variety of measures such as U.S. Treasury option-adjusted spreads, LIBOR option-adjusted spreads, carry versus treasures/swaps and dollar-rolls.
Strategy features
Investment approach
Using a multi-dimensional approach to establish investment preferences, we employ a neutral duration, relative value style that emphasizes yield curve positioning. In an effort to minimize downside volatility, our team seeks a balance in various portfolio risks—such as credit, contingency, convexity, interest rate, geography, sector and basis risks. Diligent, independent credit research is a hallmark to our approach.
Strategy features
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Important risk information
Bonds are subject to interest rate risk. When interest rates rise, bond prices fall; generally the longer a bond’s maturity, the more sensitive it is to this risk. Bonds may also be subject to call risk, which is the risk that the issuer will redeem the debt at its option, fully or partially, before the scheduled maturity date. The market value of debt instruments may fluctuate, and proceeds from sales prior to maturity may be more or less than the amount originally invested or the maturity value due to changes in market conditions or changes in the credit quality of the issuer. Bonds are subject to the credit risk of the issuer. This is the risk that the issuer might be unable to make interest and/or principal payments on a timely basis. Bonds are also subject to reinvestment risk, which is the risk that principal and/or interest payments from a given investment may be reinvested at a lower interest rate. Investing in high yield bonds, which tend to be more volatile than investment grade fixed income securities, is speculative. These bonds are affected by interest rate changes and the creditworthiness of the issuers, and investing in high yield bonds poses additional credit risk, as well as greater risk of default.
Investments are subject to various risks, including market fluctuations, regulatory change, possible delays in repayment and loss of income and principal invested. The value of investments can fall as well as rise and may not recover the amount originally invested at any point in time. Furthermore, substantial fluctuations of the value of the investment are possible even over short periods of time.
