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.
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.
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.
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.
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.
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.
Investment approach - Bank Loans
Rigorous fundamental credit analysis is the foundation in minimizing defaults and avoiding downside risk.
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.
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.
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.
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