Fixed Income Process


Objective: Create Value through Consistent Excess Returns and Minimal Risk

Hudson Edge Investment Partners’ fixed income investment process focuses on the active management of spread and credit risk in lieu of interest rate risk. By utilizing extensive credit research, economic models, security option-adjusted analysis, Hudson Edge Investment Partners are able to identify and capitalize on opportunities and pricing inefficiencies in the bond market.

A repeatable, risk-focused investment process

  • Implemented by experienced investment professionals that have managed through multiple economic and credit cycles
  • Customized portfolios can be created to meet the individual needs of investors
  • Flexibility to adapt to event driven market themes through a nimble investment process to maintain downside protection
  • Integrating strict risk management controls at every stage of the investment process

Step 1

Macro Review

Top Down Macro Views

  • Federal Reserve/Central Bank Policy
  • Fiscal Policy
  • Geopolitical Landscape
  • Yield Curve Analysis/Inflation Expectations
  • Collaborative Team Approach

Step 2

Fundamental Analysis

Fundamental Analysis

  • Corporate structure and balance sheet trends
  • Credit agency ratings
  • Management and corporate wealth creation strategies
  • Risk assessment & Independent, third-party research
  • Sector and sub-sector review and comparisons

Step 3

Portfolio Construction

Customized Portfolios

  • Client guidelines
  • Risk / return discussions
  • Structured to maintain downside protection
  • Duration is managed to mitigate interest rate risk
  • Balanced portfolio construction and diversified exposure to credit-based securities

Step 4

Sell Discipline

Employ a Well-Defined Sell Discipline

  • Relative value based on current and historical market conditions
  • Fully valued (narrow spread) relative to like investment opportunities
  • Adverse trends in credit quality, liquidity or company management
  • Monitor portfolios and markets
  • Search for return maximization opportunities
  • Be aware of market risks before they become portfolio risks

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