Neuberger Berman Strat Inc USD I Acc |
by Max Curtin
We have qualitatively reviewed this strategy and reaffirmed its Process and People ratings. Neuberger Berman’s experienced multisector managers continue to ply a dynamic, blended approach with multiple sources of returns. The following text is from Aug. 9, 2023. Neuberger Berman Strategic Income’s expansive research engine aids managers of this relative value approach in adding value for investors over time. The firm’s deep investment resources align well with this strategy’s goal to generate outperformance through credit selection. Deputy fixed-income CIO Ashok Bhatia joined the firm from Wells Fargo in 2017 before eventually succeeding the longtime lead manager of this strategy, Andrew Johnson, the following year. Bhatia collaborates with 42-year veteran and fixed-income CIO Brad Tank, Thanos Bardas, and David Brown to oversee the fund’s sector and risk allocations; the group averages over three decades of industry experience. Sector specialist teams, such as those focused on securitized and non-investment-grade credit, are integral to this diversified portfolio’s success. This strategy’s systematic multisector approach blends quantitative and qualitative analysis to guide portfolio positioning. Sector specialist leads project return distributions for their respective sectors and subsectors using a variety of macro factors. These are taken alongside historical return distributions and fed into a quantitative optimizer—a variation of the Black-Litterman Model—to produce an efficient frontier. The comanagers weigh these recommendations heavily when finalizing sector allocations at least every other week. The supporting sector groups own selection and trade execution for their respective sleeves of the portfolio, following a methodical credit selection process that is standardized across Neuberger Berman’s fixed-income platform. The resulting portfolio is one that is both dynamic in its profile but prudent in adhering to its investment-grade volatility guidelines. Government-guaranteed agency mortgage-backed securities have been featured more prominently here in 2023 as the team has looked to take advantage of attractive relative value opportunities while building more defense into the portfolio; its 41% stake as of June 2023 is the largest since 2008 and well above the portfolio’s 25% since-inception average. Long-term performance across vehicles is competitive on both an absolute and a volatility-adjusted (as measured by Sharpe ratio) basis. The U.S. 40-Act fund’s Institutional shares ranked in the second quintile relative to a group of distinct multisector bond Morningstar Category peers on both metrics between January 2018 and July 2023, a proxy for Bhatia’s tenure on the fund. |
Morningstar Pillars | |
People | Above Average |
Parent | Above Average |
Process | Above Average |
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