Unsubscribe

Confirm you would like to unsubscribe from this list

Remove strategy

Confirm you would like to remove this strategy from your list

Welcome to Thornburg

Please select your location and role to help personalize the site.
Please review our Terms & Conditions

For Institutional / Wholesale / Professional Clients

The content on this website is intended for institutional and professional investors in the United States only and is not suitable for individual investors or non-U.S. entities. Institutional and professional investors include pension funds, investment companies registered under the Investment Company Act of 1940, financial intermediaries, consultants, endowments and foundations, and investment advisors registered under the Investment Advisors Act of 1940.

TERMS AND CONDITIONS OF USE

Please read the information below. By accessing this web site of Thornburg Investment Management, Inc. ("Thornburg" or "we"), you acknowledge that you understand and accept the following terms and conditions of use.

Disclaimers

Products or services mentioned on this site are subject to legal and regulatory requirements in applicable jurisdictions and may not be licensed or available in all jurisdictions and there may be restrictions or limitations to whom this information may be made available. Unless otherwise indicated, no regulator or government authority has reviewed the information or the merits of the products and services referenced herein. Past performance is not a reliable indicator of future performance. Investments carry risks, including possible loss of principal.

Reference to a fund or security anywhere on this website is not a recommendation to buy, sell or hold that or any other security. The information is not a complete analysis of every material fact concerning any market, industry, or investment, nor is it intended to predict the performance of any investment or market.

All opinions and estimates included on this website constitute judgements of Thornburg as at the date of this website and are subject to change without notice.

All information and contents of this website are furnished "as is." Data has been obtained from sources considered reliable, but Thornburg makes no representation as to the completeness or accuracy of such information and has no obligation to provide updates or changes. Thornburg disclaims, to the fullest extent of the law, any implied or express warranty of any kind, including without limitation the implied warranties of merchantability, fitness for a particular purpose and non-infringement.

If you live in a state that does not allow disclaimers of implied warranties, our disclaimer may not apply to you.

Although Thornburg intends the information contained in this website to be accurate and reliable, errors sometimes occur. Thornburg does not warrant that the information to be free of errors, that the functions contained in the site will be uninterrupted, that defects will be corrected or that the site and servers are free from viruses or other harmful components. You agree that you are responsible for the means you use to access this website and understand that your hardware, software, the Internet, your Internet service provider, and other third parties involved in connecting you to our website may not perform as intended or desired. We also disclaim responsibility for damages third parties may cause to you through the use of this website, whether intentional or unintentional. For example, you understand that hackers could breach our security procedures, and that we will not be responsible for any related damages.

Thornburg Investment Management, Inc. is regulated by the U.S. Securities and Exchange under U.S. laws which may differ materially from laws in other jurisdictions.

Online Privacy and Cookie Policy

Please review our Online Privacy and Cookie Policy, which is hereby incorporated by reference as part of these terms and conditions.

Third Party Content

Certain website's content has been obtained from sources that Thornburg believes to be reliable as of the date presented but Thornburg cannot guarantee the accuracy, timeliness, completeness, or suitability for use of such content. The content does not take into account individual investor's circumstances, objectives or needs. The content is not intended as an offer or solicitation with respect to the purchase or sale of any security or other financial instrument or any investment management services, nor does it constitute investment advice and should not be used as the basis for any investment decision.

Suitability

No determination has been made regarding the suitability of any securities, financial instruments or strategies for any investor. The website's content is provided on the basis and subject to the explanations, caveats and warnings set out in this notice and elsewhere herein. The website's content does not purport to provide any legal, tax or accounting advice. Any discussion of risk management is intended to describe Thornburg's efforts to monitor and manage risk but does not imply low risk.

Limited License and Restrictions on Use

Except as otherwise stated in these terms of use or as expressly authorized by Thornburg in writing, you may not:

  • Modify, copy, distribute, transmit, post, display, perform, reproduce, publish, broadcast, license, create derivative works from, transfer, sell, or exploit any reports, data, information, content, software, RSS and podcast feeds, products, services, or other materials (collectively, "Materials") on, generated by or obtained from this website, whether through links or otherwise;
  • Redeliver any page, text, image or Materials on this website using "framing" or other technology;
  • Engage in any conduct that could damage, disable, or overburden (i) this website, (ii) any Materials or services provided through this website, or (iii) any systems, networks, servers, or accounts related to this website, including without limitation, using devices or software that provide repeated automated access to this website, other than those made generally available by Thornburg;
  • Probe, scan, or test the vulnerability of any Materials, services, systems, networks, servers, or accounts related to this website or attempt to gain unauthorized access to Materials, services, systems, networks, servers, or accounts connected or associated with this website through hacking, password or data mining, or any other means of circumventing any access-limiting, user authentication or security device of any Materials, services, systems, networks, servers, or accounts related to this website; or
  • Modify, copy, obscure, remove or display the Thornburg name, logo, trademarks, notices or images without Thornburg's express written permission. To obtain such permission, you may e-mail us at info@thornburg.com.

Severability, Governing Law

Failure by Thornburg to enforce any provision(s) of these terms and conditions shall not be construed as a waiver of any provision or right. This website is controlled and operated by Thornburg from its offices in Santa Fe, New Mexico. The laws of the State of New Mexico govern these terms and conditions. If you take legal action relating to these terms and conditions, you agree to file such action only in state or federal court in New Mexico and you consent and submit to the personal jurisdiction of those courts for the purposes of litigating any such action.

Termination

You acknowledge and agree that Thornburg may restrict, suspend or terminate these terms and conditions or your access to, and use, of the all or any part this website, including any links to third-party sites, at any time, with or without cause, including but not limited to any breach of these terms and conditions, in Thornburg's absolute discretion and without prior notice or liability.

Decline

Give Us a Call

Fund Operations
800.847.0200

FIND ANOTHER CONTACT
Capital Preservation

Tough Sledding in Multisector Bond Investing? It Depends on the Team.

Thornburg Investment Management
19 Sep 2017
4 min read

Versatile, relative-value analysis of securities across sub-sectors and hybrid asset classes can help fixed income teams negotiate a challenging, expansive, potentially rewarding terrain.

The Iditarod is considered one of the world’s most grueling and dangerous races. Sled dogs travel 1,100 miles through increasingly treacherous arctic terrain. The dogs and mushers traditionally run the entire day and then rest at night, and the journey can last for more than a week. Athletes competed like this for decades, with small adjustments to training regimens, but nothing revolutionary. The status quo reigned supreme until Susan Butcher ripped up the orthodoxy.

People naturally tend to prefer what’s familiar across most aspects of life, including investing. In psychology this is commonly referred to as the status quo bias. It is an innate inclination, making it difficult for us humans to avoid. We take the current state of affairs as a reference point and any deviation is generally viewed as a loss. The bias tends to interact with other documented non-rational cognitive pitfalls such as loss aversion, endowment effect, and regret avoidance—all natural cognitive errors that can lead investors to suboptimal financial decisions. In the realm of dog sled racing, Butcher soundly avoided the status quo by taking a fresh, unconventional approach to become a legend in the annals of Iditarod history.

Instead of running in the traditional fashion, which was twelve hours on and twelve hours off, she worked and rested her dogs in alternating four-to six-hour chunks throughout both night and day. The racing orthodoxy at the time viewed the method as risky. It gave her less time to sleep: while her dogs slept, she prepared for the next leg. However, Butcher was sure her strategy would lead to an advantage versus the competition and trained accordingly. Additionally, as a veterinary technician, she was a leader in the humane treatment of her dogs—an ESG-environmental, social, governance-investing tenet—making year-round care and training the standard for her team rather than the exception as it was at the time.

Other racers said Butcher’s methods wouldn’t work. After all, theirs were proven over decades. According to her husband, “In those days, the Iditarod was considered a man’s cowboy-type sport-rough and tumble. You did it because you were tough. Other racers said Susan could never win—‘she babies her dogs’.” But she won, and repeatedly: a record four times in a row. In her honor Alaska proclaimed the first day of the Iditarod Susan Butcher Day. “She fundamentally changed how folks prepare and run the race now,” her husband points out. Butcher’s unique approach to structuring her training and team led to unprecedented success in her sport.

What can we as investors learn from the legendary sled racer? Well, we can take note of her willingness to take a different, innovative approach, structuring her strategy and her team’s training to better negotiate the challenging environment in which she competed. Perhaps fixed income investors, particularly those seeking exposures to a wide variety of discrete asset classes, could benefit from a more flexible approach to cross-asset investing.

Asset managers historically built fixed income investment teams based on broad asset classes represented in a benchmark. Generally, first came analysts focused on U.S. Treasuries and agencies, then perhaps additional support was added around agency mortgage-backed securities, followed by investment-grade credit, and finally high-yield corporates and other riskier “plus” sectors. In theory, this team structure enables the bottom-up selection of best-in-class securities within a narrow silo that are then pushed up to a portfolio manager for inclusion in top-down allocation decisions for a core benchmark-like portfolio. Part and parcel of this structure is the notion that a sector analyst focused solely on a single industry, say U.S. automobiles, is best equipped to pick the best opportunity within that industry. That could be Ford one month, and GM the next. Whatever the case, the auto analyst is the team expert on U.S. auto manufacturers. But what if neither is particularly compelling compared to other sectors or fixed income sub-asset class credits? Should a place in the portfolio necessarily be maintained for U.S. auto sector exposure?

Once investment strategies began crossing boundaries, mixing discrete segments of investment grade, high yield, emerging market debt, etc., and drilling down into even more granular industry segments within each, things became complicated. Traditional core bond team structures have largely remained dual top-down, bottom-up processes, limiting flexibility. If clients are seeking a different outcome from their active managers with a multi-sector approach, it may make more sense for the asset manager to be structured more flexibly…More attractive relative valuation is often missed if specialists don’t adequately assess both fundamentals and relative value of securities both inside and outside their specialties, constraining the manager’s choices.

A versatile investment team structured to conduct fundamental analysis of individual securities across sectors and a wide variety of sub-asset classes, evaluating them both in relation to those currently in the portfolio and sundry to others outside it, may be better positioned to provide an optimal investment mix capable of delivering across a range of macroeconomic environments. It’s not easy to deviate from traditional norms, but whether in dog sled racing or investing, progress oftentimes depends on it.

Discover more about:

Stay Connected

Subscribe now to stay up-to-date with Thornburg’s news and insights.
Subscribe

More Insights

Observations in Equities: Recession Fears Shadow the Stocks

Co-Head of Investments and Managing Director Ben Kirby reviews 2022 to-date and looks at the chance of recession and the relative value of ex-U.S. markets.
Markets & Economy

Observations in Fixed Income: Central Banks Dominate the Year

Jeff Klingelhofer, Co-Head of Investments & Managing Director, looks to a period when the Fed's mandates of low inflation and high employment may not peacefully coexist.
Markets

Emerging Investment Opportunities in Cell and Gene Therapies

Cell and gene therapies are biopharma’s next frontier. We see significant investment opportunities in biopharmaceutical manufacturers and biotech companies.

Our insights. Your inbox.

Sign up to receive timely market commentary and perspectives from our financial experts delivered to your inbox weekly.
This field is for validation purposes and should be left unchanged.
Feedback