Corporate Focus Fixed Income Strategy

Investment Strategies

Go for More than Just Income

  • Pursuit of Higher Yields — Corporate bonds have offered the potential for higher yield over most government bonds.
  • Potential for Capital Appreciation — When bought at a discount, a corporate bond may provide principal growth in addition to income as the bond’s value may appreciate to our estimate of its true worth over time.
  • Seek Real Return — Low interest rates coupled with rising inflation can result in a negative real rate of return– corporate bonds’ potentially higher yields may help offset the effects of inflation.
  • Sector Diversification — A mix of investment- grade and high-yield issuers can complement a portfolio that may be heavy on government bonds.

Key Advantages: Brandes Corporate Focus Fixed Income

  • Total Return Potential — High yielding but potentially undervalued corporate bonds may offer attractive price appreciation potential.
  • Higher Yield Potential — The strategy pursues corporate bond investments that have typically produced higher yields than the Bloomberg Barclays U.S. Intermediate Credit Bond Index.
  • Fundamental, Bottom-up Approach — Helps identify issuers with the fewest credit and default risks.
  • Flexibility — By allocating differently than the benchmark, the strategy offers diversified sector coverage to complement other traditional fixed-income investments.
  • Built-in Risk Management — Adaptable, duration-controlled approach attempts to help mitigate excessive interest-rate risk.

Value Is Not Just for Equity Investing

  • Applying its time-tested value approach, Brandes buys corporate bonds that it believes are mispriced, as well as those offering higher yield than U.S. Treasuries. This can offer investors a favorable total-return proposition—the potential for short-term higher yield and long-term capital gains appreciation.
  • Brandes adheres to a focused, transparent and easy-to-understand fixed-income investment process. Its corporate-bond selection process begins with an assessment of credit risk, as it aims to buy bonds priced at a discount to the firm’s assessment of credit quality two to five years forward.
  • This approach implicitly assumes that credit ratings published by one or more of the major rating agencies do not fully capture the underlying value of select fixed-income securities.

Past performance is not a guarantee of future results.

No investment strategy can assure a profit or protect against loss. Diversification does not assure a profit or protect against a loss in a declining market.

Duration is defined as the weighted maturity of a fixed-income investment’s cash flows, used in the estimation of the price sensitivity of fixed-income securities for a given change in interest rates.

The Bloomberg Barclays U.S. Intermediate Credit Bond Index measures performance of U.S. dollar-denominated U.S. Treasuries, government-related and investment-grade U.S. corporate securities that have remaining maturities of greater than one year and less than ten years. This index is a total return index which reflects the price changes and interest of each bond in the index.

Unlike bonds issued or guaranteed by the U.S. government or its agencies, stocks and other bonds are not backed by the full faith and credit of the United States. Stock and bond prices will experience market fluctuations. Please note that the value of government securities and bonds in general have an inverse relationship to interest rates. Bonds carry the risk of default, or the risk that an issuer will be unable to make income or principal payment. There is no assurance that private guarantors or insurers will meet their obligations. The credit quality of the investments in the portfolio is no guarantee of the safety or stability of the portfolio. Investments in Asset Backed and Mortgage Backed Securities include additional risks that investors should be aware of such as credit risk, prepayment risk, possible illiquidity and default, as well as increased susceptibility to adverse economic developments.

This material is intended for informational purposes only. The information provided in this material should not be considered a recommendation to purchase or sell any particular security. It should not be assumed that any security transactions, holdings, or sectors discussed were or will be profitable, or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance discussed herein. Portfolio holdings and allocations are subject to change at any time. Strategies discussed herein are subject to change at any time by the investment manager in its discretion due to market conditions or opportunities. Market conditions may impact performance.

The Brandes Corporate Focus Fixed Income Strategy seeks long-term returns in excess of its benchmark (the Bloomberg Barclays Intermediate U.S. Credit Index) by investing primarily in corporate debt and high quality United States government and agency securities. The strategy will be predominately invested in corporate debt obligations issued by U.S. and non-U.S. corporations. A minimum of 50% of the investments must be rated investment grade by a nationally recognized rating agency at the time of purchase. An additional 30% may be invested in non U.S. dollar denominated debt instruments measured at the time of purchase. We expect the strategy to be invested in approximately 60-150 issues. With the exception of United States Treasury securities, typically no more than 30% of the value of total strategy assets will be invested in any single U.S. agency at the time of purchase. No more than 10% of the value of a strategy’s assets may be invested in any other single issuer at the time of purchase.

The strategy benchmark is the Bloomberg Barclays U.S. Intermediate Credit Bond Index.

GIPS® Compliant Presentation:

Annualized Performance (Net)

THROUGH September 30, 2018 | REPORTING CURRENCY: USD
 
1 Year
3 Years
5 Years
7 Years
10 Years
15 Years
Since Inception 6/30/2000
Corporate Focus Fixed Income
1.13%
3.75%
3.29%
4.13%
6.14%
4.56%
5.49%
Primary Benchmark (a)
-0.62%
2.03%
2.46%
2.93%
5.05%
4.04%
5.11%
Relative Performance
1.75%
1.72%
0.83%
1.20%
1.09%
0.52%
0.38%

Annualized Performance (Gross)

THROUGH September 30, 2018 | REPORTING CURRENCY: USD
 
1 Year
3 Years
5 Years
7 Years
10 Years
15 Years
Since Inception 6/30/2000
Corporate Focus Fixed Income
1.47%
4.11%
3.64%
4.48%
6.49%
4.93%
5.86%
Primary Benchmark (a)
-0.62%
2.03%
2.46%
2.93%
5.05%
4.04%
5.11%
Relative Performance
2.09%
2.08%
1.18%
1.55%
1.44%
0.89%
0.75%

Annual Periods (Net)

THROUGH September 30, 2018 | REPORTING CURRENCY: USD
 
2017
2016
2015
2014
2013
2012
2011
Corporate Focus Fixed Income
3.68%
9.63%
-2.79%
3.92%
1.40%
11.36%
4.27%
Primary Benchmark (a)
3.67%
3.68%
0.90%
4.16%
-0.17%
8.10%
5.37%
 
2010
2009
2008
2007
2006
2005
2004
Corporate Focus Fixed Income
13.95%
30.85%
-26.14%
2.39%
9.43%
3.33%
8.65%
Primary Benchmark (a)
7.76%
15.93%
-2.76%
5.60%
4.49%
1.42%
4.08%
 
2003
2002
2001
Corporate Focus Fixed Income
18.47%
2.57%
9.76%
Primary Benchmark (a)
6.91%
10.14%
9.77%

Quarterly Performance (Net And Gross)

THROUGH September 30, 2018 | REPORTING CURRENCY: USD
Year
 
1Q
2Q
3Q
4Q
YTD
2018
NET
GROSS
Primary Benchmark (a)
00 -0.32%
00 -0.23%
00 -1.36%
-00 0.71%
-00 0.80%
00 -0.08%
-00 0.66%
-00 0.75%
-00 0.73%
-0000000
-0000000
-0000000
-00 1.06%
-00 1.32%
00 -0.73%
2017
NET
GROSS
Primary Benchmark (a)
-00 1.16%
-00 1.24%
-00 1.14%
-00 1.39%
-00 1.48%
-00 1.38%
-00 1.02%
-00 1.11%
-00 0.99%
-00 0.07%
-00 0.15%
-00 0.11%
-00 3.68%
-00 4.03%
-00 3.67%
2016
NET
GROSS
Primary Benchmark (a)
-00 3.07%
-00 3.16%
-00 2.70%
-00 4.13%
-00 4.22%
-00 2.12%
-00 2.88%
-00 2.97%
-00 0.77%
00 -0.71%
00 -0.62%
00 -1.90%
-00 9.63%
-0 10.01%
-00 3.68%
2015
NET
GROSS
Primary Benchmark (a)
-00 1.63%
-00 1.71%
-00 1.77%
00 -0.63%
00 -0.54%
00 -0.94%
00 -1.00%
00 -0.92%
-00 0.54%
00 -2.77%
00 -2.69%
00 -0.45%
00 -2.79%
00 -2.47%
-00 0.90%
2014
NET
GROSS
Primary Benchmark (a)
-00 1.81%
-00 1.90%
-00 1.63%
-00 1.64%
-00 1.73%
-00 1.79%
00 -0.28%
00 -0.19%
00 -0.11%
-00 0.70%
-00 0.78%
-00 0.80%
-00 3.92%
-00 4.27%
-00 4.16%
2013
NET
GROSS
Primary Benchmark (a)
-00 1.63%
-00 1.72%
-00 0.47%
00 -2.04%
00 -1.96%
00 -2.30%
-00 0.52%
-00 0.60%
-00 1.01%
-00 1.32%
-00 1.41%
-00 0.68%
-00 1.40%
-00 1.73%
00 -0.17%
2012
NET
GROSS
Primary Benchmark (a)
-00 4.84%
-00 4.93%
-00 2.50%
-00 1.15%
-00 1.23%
-00 1.53%
-00 3.65%
-00 3.74%
-00 2.90%
-00 1.31%
-00 1.40%
-00 0.95%
-0 11.36%
-0 11.73%
-00 8.10%
2011
NET
GROSS
Primary Benchmark (a)
-00 2.59%
-00 2.66%
-00 0.99%
-00 1.90%
-00 1.97%
-00 2.21%
00 -1.54%
00 -1.46%
-00 0.94%
-00 1.31%
-00 1.39%
-00 1.13%
-00 4.27%
-00 4.59%
-00 5.37%
2010
NET
GROSS
Primary Benchmark (a)
-00 4.65%
-00 4.73%
-00 2.35%
-00 1.65%
-00 1.72%
-00 2.41%
-00 5.72%
-00 5.80%
-00 4.07%
-00 1.33%
-00 1.40%
00 -1.22%
-0 13.95%
-0 14.30%
-00 7.76%
2009
NET
GROSS
Primary Benchmark (a)
00 -0.22%
00 -0.12%
00 -0.05%
-0 14.89%
-0 15.00%
-00 7.59%
-0 10.14%
-0 10.22%
-00 6.10%
-00 3.62%
-00 3.71%
-00 1.61%
-0 30.85%
-0 31.29%
-0 15.93%
2008
NET
GROSS
Primary Benchmark (a)
00 -3.45%
00 -3.36%
-00 1.29%
00 -0.18%
00 -0.08%
00 -1.00%
0 -13.93%
0 -13.85%
00 -5.60%
0 -10.95%
0 -10.86%
-00 2.72%
0 -26.14%
0 -25.85%
00 -2.76%
2007
NET
GROSS
Primary Benchmark (a)
-00 2.00%
-00 2.08%
-00 1.69%
00 -0.58%
00 -0.45%
00 -0.40%
-00 0.52%
-00 0.68%
-00 2.05%
-00 0.44%
-00 0.53%
-00 2.17%
-00 2.39%
-00 2.86%
-00 5.60%
2006
NET
GROSS
Primary Benchmark (a)
-00 1.42%
-00 1.51%
00 -0.53%
-00 0.73%
-00 0.82%
-00 0.06%
-00 3.63%
-00 3.71%
-00 3.67%
-00 3.36%
-00 3.45%
-00 1.27%
-00 9.43%
-00 9.80%
-00 4.49%
2005
NET
GROSS
Primary Benchmark (a)
00 -0.23%
00 -0.15%
00 -1.17%
-00 2.99%
-00 3.08%
-00 2.76%
-00 0.48%
-00 0.57%
00 -0.52%
-00 0.08%
-00 0.17%
-00 0.39%
-00 3.33%
-00 3.69%
-00 1.42%
2004
NET
GROSS
Primary Benchmark (a)
-00 2.39%
-00 2.48%
-00 2.82%
00 -0.93%
00 -0.84%
00 -2.82%
-00 4.19%
-00 4.28%
-00 3.37%
-00 2.80%
-00 2.89%
-00 0.77%
-00 8.65%
-00 9.03%
-00 4.08%
2003
NET
GROSS
Primary Benchmark (a)
-00 4.04%
-00 4.13%
-00 2.26%
-00 8.00%
-00 8.10%
-00 4.02%
-00 2.16%
-00 2.25%
-00 0.12%
-00 3.20%
-00 3.29%
-00 0.39%
-0 18.47%
-0 18.88%
-00 6.91%
2002
NET
GROSS
Primary Benchmark (a)
00 -1.68%
00 -1.59%
00 -0.17%
00 -1.32%
00 -1.23%
-00 3.18%
-00 1.17%
-00 1.26%
-00 4.19%
-00 4.49%
-00 4.59%
-00 2.63%
-00 2.57%
-00 2.93%
-0 10.14%
2001
NET
GROSS
Primary Benchmark (a)
-00 4.42%
-00 4.51%
-00 3.97%
-00 1.06%
-00 1.15%
-00 1.01%
-00 2.59%
-00 2.68%
-00 4.15%
-00 1.38%
-00 1.47%
-00 0.35%
-00 9.76%
-0 10.14%
-00 9.77%
2000
NET
GROSS
Primary Benchmark (a)
-0000000
-0000000
-0000000
-0000000
-0000000
-0000000
-00 3.12%
-00 3.21%
-00 3.21%
-00 2.00%
-00 2.09%
-00 3.27%
-00 5.18%
-00 5.37%
-00 6.58%

Composite Characteristics

THROUGH September 30, 2018 | REPORTING CURRENCY: USD
Year
#Accts
Assets
(mil)
Dispersion
% of non-fee
paying assets
Total Firm
Assets (mil)
2018
-000,00 2
-000,0 65
-000,
-000,
-0 22,449
2017
-000,00 2
-000,0 83
-00 0.17
-00 0
-0 25,578
2016
-000,00 3
-000, 113
-00, N/A
-00 0
-0 22,971
2015
-000,00 3
-000, 108
-00, N/A
-00 0
-0 20,666
2014
-000,00 3
-000, 120
-00, N/A
-00 0
-0 20,722
2013
-000,00 3
-000, 119
-00, N/A
-00 0
-0 21,464
2012
-000,00 3
-000, 106
-00, N/A
-00 0
-0 22,171
2011
-000,00 3
-000,0 71
-00, N/A
-0 16
-0 26,658
2010
-000,00 3
-000,0 71
-00, N/A
-0 16
-0 38,659
2009
-000,00 3
-000,0 65
-00, N/A
-0 15
-0 42,152
2008
-000,00 3
-000,0 37
-00, N/A
-0 18
-0 40,591
2007
-000,00 3
-000,0 46
-00, N/A
-0 20
-0 83,242
2006
-000,00 1
-000,0 10
-00, N/A
-0 88
-0 85,974
2005
-000,00 1
-000,00 8
-00, N/A
- 100
- 101,874
2004
-000,00 1
-000,00 8
-00, N/A
- 100
-0 98,078
2003
-000,00 1
-000,00 7
-00, N/A
- 100
-0 75,789
2002
-000,00 1
-000,00 6
-00, N/A
- 100
-0 51,808
2001
-000,00 1
-000,00 6
-00, N/A
- 100
-0 61,996
2000
-000,00 1
-000,00 5
-00, N/A
- 100
-0 50,852
THROUGH September 30, 2018 | REPORTING CURRENCY: USD

The results for individual accounts and for different periods may vary.  Investors should not rely on prior performance results as a reliable indication of future results. Market conditions may impact performance. The performance results presented were achieved in particular market conditions which may not be repeated. Moreover, the current market volatility and uncertain regulatory environment may have a negative impact on future performance.
As of September 30, 2013, Brandes Investment Partners includes the non-SMA Division of Brandes Investment Partners L.P., Brandes Investment Partners (Europe) Limited, Brandes Investment Partners (Asia) Pte Ltd and the Brandes Investment Partners & Co. assets sub-advised by Brandes Investment Partners, L.P. The firm was redefined to reflect the expansion of the organization. As of January 1, 2006, Brandes Investment Partners was divided into two separate divisions: the SMA Division of Brandes Investment Partners, which acts as a discretionary manager to SMA or “wrap fee” program clients, including those who may invest in an SMA product; and the non-SMA Division of Brandes Investment Partners (Brandes), which acts as a discretionary manager for all other types of clients which may include pooled investment vehicles, institutional accounts and high net worth clients outside of wrap fee programs. Although the divisions may share portfolio management and other personnel, each division serves a particular target market, may trade in a different manner and may offer investment advice which differs from the other depending upon the individualized needs of the clients served. The performance data presented does not contain any SMA Division accounts.
The Brandes Corporate Focus Fixed Income Composite seeks long-term returns in excess of its benchmark (the Bloomberg Barclays U.S. Intermediate Credit Bond Index) by investing primarily in corporate debt and high quality United States government and agency securities. The composite will be predominately invested in corporate debt obligations issued by U.S. and non-U.S. corporations. A minimum of 50% of the investments must be rated investment grade by a nationally recognized rating agency at the time of purchase. An additional 30% may be invested in non U.S. dollar denominated debt instruments measured at the time of purchase. With the exception of United States Treasury securities, typically no more than 30% of the value of total composite assets will be invested in any single U.S. agency at the time of purchase. No more than 10% of the value of a composite’s assets may be invested in any other single issuer at the time of purchase. The composite's duration is generally within a 20% margin (higher or lower) of its benchmark index duration. The firm believes this fixed income composite to be aggressive with regard to certain risks, especially credit risk.
Brandes claims compliance with the Global Investment Performance Standards (GIPS®). To receive a list of composite descriptions and/or presentation that complies with GIPS standards, contact client service at 800-237-7119 or write 11988 El Camino Real, Suite 600, P.O. Box 919048, San Diego, California 92191-9048 or email ClientService@Brandes.com.
(a) The Bloomberg Barclays U.S. Intermediate Credit Bond Index measures the performance of U.S. Dollar denominated U.S. Treasuries, government-related and investment grade U.S. corporate securities that have a remaining maturity of greater than one year and less than ten years. This index is a total return index which reflects the price changes and interest of each bond in the index. The benchmark returns are not covered by the report of independent verifiers.
Brandes Investment Partners® is a registered trademark of Brandes Investment Partners, L.P. in the United States and Canada.