Strategy Objectives

The Pioneer Long Duration Credit - Higher Quality Strategy invests across a broad range of credit securities seeking to achieve strong risk-adjusted returns primarily through security selection and active sector, industry, and quality allocation. The strategy utilizes an expanded opportunity set that includes significant BBB-rated issues and modest non-investment grade exposures, as well as subordinated securities and off-the-run issues, to increase the potential for higher return. These investments can also help diversify* portfolio risk, by reducing risk inherent in the highly concentrated benchmark and broadening industry exposures. Duration and yield curve represent secondary alpha sources.

* Diversification does not guarantee a profit or protect against a loss.

 

Key Features

The Long Duration Credit - Higher Quality Strategy is distinguished by the following key features:

  • Value Approach: This Strategy assesses relative value across industry sectors and issuers, seeking strong risk-adjusted returns based on attractively priced sectors and securities with stable or improving outlooks. Sector rotation reflects our relative value, economic cycle stage and secular views. Security selection focuses on identifying issuers with attractive total return prospects and those securities within an issuer complex, looking across capital structures, deal size and maturities that may offer higher spreads with modest additional risk.
  • Broad Opportunity Set: Issuer concentration risk is reduced by expanding the opportunity set to permit allocations to BBB and non-US-domiciled issuers, modest allocations to BB/B issues, subordinated securities and off-the-run issues. Increasing BBB allocation broadens industry diversification by including sectors that carry maximum BBB rating. Inclusion of the BBB universe more than doubles the number of issuers available to invest in and reduces issuer concentration risk.
  • Seasoned Global Credit Research Team, Disciplined Process: The credit research process is comprised of Pioneer's three pillars of credit research: strong underwriting/buy discipline, comprehensive surveillance and strict exposure management. Pioneer's proprietary global research platform provides broad access to an active coverage list focused on recommendation and investment thesis, internal credit rating, fundamental momentum and downgrade risk. The 27-member Credit Research team average approximately 15 years of investment experience.
  • Boutique Size: Pioneer Long Duration Credit - Higher Quality Strategy leverages the full resources of Pioneer's fixed income platform. We believe our size is an appropriate balance between ample scale and resources with the ability to remain nimble within a niche part of the credit market. Relative to our larger peers, we believe we can access unique and meaningful investment opportunities in smaller deal sizes or off-the-run securities. In ourview, this will become increasingly important as plan sponsors continue to pursue volatility-driven Investing strategies.
  • Proven Results, Strong Risk-Adjusted Returns: The Strategy has achieved strong long-term, absolute and risk-adjusted performance versus our benchmark and peers.

 

Literature

Strategy Fact Sheet Request Product Profile

Portfolio Management


Ken Taubes
Executive Vice President,
Chief Investment Officer, US
biography

 


Charles Melchreit, CFA
Senior Vice President,
Director of Investment Grade, Portfolio Manager
biography

 


Brad Komenda, CFA
Vice President,
Portfolio Manager
biography

Strategy Highlights

Inception Date
December 31, 2009

 

Benchmark
BofA Merrill Lynch US Corporates A-AAA Rated 10+ Years 3% Constrained Index