Download Investment Grade Corporate Strategy

separately managed accounts | taxable fixed income
Investment Grade Corporate Strategy
first quarter 2017
as of 3/31/2017
Firm Facts
Nuveen Asset Management is a premier investment
boutique with a product and service mix that spans from
traditional and specialized equity to municipal and taxable
fixed income.
▪▪ 192 investment professionals
▪▪ $161.9 billion in Assets Under Management1
Investment Objective
Seeks to deliver current income and capital appreciation by investing
in high-grade corporate securities.
Investment Process
▪▪ Collaborative Approach: Our process begins and ends with
collaboration by the primary participants in the investment
decision. Our Fixed Income Strategy Committee provides
strategic guidance for our fixed-income portfolios. Our sector
teams present sector analysis and make recommendations to the
Fixed Income Strategy Committee. They also implement sector
strategies and security selection within their individual sectors.
Our research analysts provide valuable insight to inform asset
allocation decisions, to trigger buy and sell decisions, and to
monitor risk in our portfolios.
▪▪ Disciplined Process: Our fixed-income process is built on
careful analysis of fundamentals, technicals and valuations. We
consistently evaluate the opportunity in each sector and identify
relative value opportunities across sectors.
▪▪Focused Strategy: Our strategy seeks to drive superior riskadjusted returns by focusing on the three main drivers of fixedincome performance:
—— Industry Rotation
—— Security Selection
—— Yield-Curve Positioning and Duration Management
Investment goals
▪▪ Active management
▪▪ Intermediate-term duration
▪▪ U.S. corporate debt (investment grade at time of purchase)
▪▪ Benchmark: Bloomberg Barclays Intermediate U.S. Corporate
Index
▪▪ Credit Quality Range: AAA to A-2 at time of purchase
This presentation contains no recommendations or offer to buy or sell any specific securities and
should not be considered investment advice of any kind. The performance notes on the second
page of this factsheet are an integral part of the performance presentation. Past performance is
no guarantee of future results.
1AUM as of 3/31/2017.
2Must be rated A-(or equivalent) by at least 2 of 3 nationally recognized rating agencies at time
of purchase. Split rated securities receive the highest rating.
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
portfolio managers
Jeff J. Ebert
Head of High Grade Credit Sector Team
26 years industry experience
Chris W. Neuharth
Head of Investment Risk Management
36 years industry experience
Mackenzie S. Meyer
Assistant Portfolio Manager
15 years industry experience
Marie A. Newcome
Portfolio Manager
25 years industry experience
Investment Philosophy
▪▪ We believe superior long-term performance may be achieved
by focusing on three key strategies: industry rotation, security
selection and yield curve positioning.
▪▪ Our approach is unbiased and may emphasize one strategy over
another as market conditions change.
Target Portfolio Characteristics3
Average Maturity Target
Average Duration Target
Number of Holdings
Average Annual Turnover
Excess Return Target
Tracking Error Target
3-7 Years
3-5 Years
25-35
10-40%
25-30 basis points
40-50 basis points
Portfolio Characteristics4
Effective Duration
Yield-to-Worst
Average Maturity
Number of Holdings
Portfolio
Benchmark5
4.09 years
2.40%
4.55 years
30
4.45 years
2.82%
5.02 years
N/A
Sector Diversification4
100%
 Portfolio
 Benchmark5
Sectors of U.S. Corporates
80%
60%
40%
20%
0%
99% 100%
U.S.
Corporates
50% 58%
Industrials
3%
5%
Utilities
45% 38%
Financials
1%
0%
Cash
3Targets are not guaranteed, are subject to change, and will differ depending on client
investment guidelines 100 basis points equals 1%.
4Characteristics and sector weights are based on a model portfolio as of 3/31/2017. Your
individual account holdings and characteristics may differ from the model. Source: Nuveen
Asset Management and Bloomberg Barclays.
5Bloomberg Barclays Intermediate U.S. Corporate Index.
1
first quarter 2017
as of 3/31/2017
Investment Grade Corporate Strategy
Credit Quality Weightings
3%
2%
1%
0%
-1%
 Investment Grade Corporate (Gross)
 Investment Grade Corporate (Net)
 Bloomber Barclays Intermediate U.S. Corporate Index8
Ratings
QTD
1 Yr.
2 Yr.
3 Yr.
4 Yr.
1.03%
0.72
1.16
0.51%
-0.74
2.43
1.59%
0.33
2.18
2.41%
1.14
2.95
1.86%
0.60
2.52
Since
Inception9
2.51%
1.24
3.18
Calendar Year Performance (As of 3/31/2017)
20177
2016
2015
2014
2013
20129
(As of 3/31/2017)
Calendar Year
Total Return (Gross)
1.03%
2.11%
1.75%
3.73%
-0.81%
4.79%
Calendar Year
Total Return (Net of Fees)
0.72%
0.85%
0.49%
2.44%
-2.04%
4.03%
Benchmark
Return
1.16%
4.04%
1.08%
4.35%
0.08%
4.73%
6 Periods greater than one year are annualized.
7Primary benchmark. Benchmark sourced through Morningstar.
8Preliminary. Final numbers are available upon request by contacting Nuveen Investments Advisers, LLC.
9 Inception date is 5/31/2012. Partial period for 5/31/12-12/31/12.
The performance notes on this page are an integral part of the performance presentation. Please remember you could
lose money with this investment. Safety of principal is not guaranteed. Past performance is no guarantee of future results.
Performance is presented gross of the manager’s investment
This material is not intended to be a recommendation or
management fees and net of a model annual fee of 1.25%
investment advice, does not constitute a solicitation to buy
(which is equal to the highest manager fee for this strategy),
or sell securities, and is not provided in a fiduciary capacity.
reflects the reinvestment of dividend/interest and other
The information provided does not take into account the
earnings, and are calculated and stated in U.S. dollars. These
specific objectives or circumstances of any particular investor,
returns do not reflect taxes and other fees that would reduce
or suggest any specific course of action. Investment decisions
performance in a managed account. The gross return on
should be made based on an investor’s objectives and circuminvestment will be reduced by the fee paid to the program
stances and in consultation with his or her advisors.
sponsor, a portion of which will be paid to NAM for its services
This strategy is only provided through separately managed
to the client. Net-of-fees returns are calculated by reducing the
accounts program sponsors. Check with your financial advisor
gross-of-fees returns by 1.25% per annum, applied monthly.
for availability. Clients should consult their financial advisors
In a managed accounts program, the client, also, may be
before making any investment decisions. Financial advisors
charged a bundled fee. These fees vary by sponsor and may
should consider the suitability of the manager, strategy and
be less than the fee presented. Actual investment advisory
program for its clients on an initial and ongoing basis.
fees incurred by clients may vary. For additional information
PERFORMANCE NOTES
regarding fees specific to a broker-dealer program, contact
Nuveen Asset Management, LLC (“NAM”) offers its services
your referring financial advisor.
either directly to clients (fee-based “direct-advisory” accounts,
The composite is benchmarked against the unmanaged
fee-based “institutional” accounts and “commission-based”
Bloomberg Barclays Intermediate U.S. Corporate Index.
accounts) or through broker-dealer programs as an advisor
The index is defined as publicly issued U.S. corporate and
or sub-advisor (fee-based ”advisor-sponsored” accounts). For
specified foreign debentures and secured notes that meet
certain strategies, NAM may also offer models to financial
the specified maturity, liquidity, and quality requirements.
advisors who serve as overlay managers with investment and
To qualify, bonds must be SEC-registered. Benchmark
brokerage discretion, and maintains the advisory relationship
returns include reinvestment of income, but do not reflect
with clients. Any strategy performance and characteristics intaxes, investment advisory and other fees that would reduce
formation included herein relates to accounts for which NAM
performance in an actual account. It is not possible to invest in
exercised investment and brokerage discretion. Although it is
an index. The volatility of the index shown may be materially
generally contemplated that the financial advisor will impledifferent from that of NAM’s Investment Grade Corporate
ment the models as provided (except to the extent necessary
strategy. In addition, the holdings in the Investment Grade
to provide individualized investment services), clients and
Corporate strategy may differ significantly from the securities
their advisors should note that these differences may produce
that comprise the index.
different results. In addition, the results for individual portfolios and for different periods may vary depending on market
As of 1/1/11, Nuveen Investments, Inc. acquired the
conditions and the composition of the portfolio.
long-term asset management business of FAF advisors, Inc.
and combined it with Nuveen Investment’s wholly-owned
The Investment Grade Corporate Composite consists of Direct
subsidiary, Nuveen Asset Management. No material change
Advisory Institutional Accounts managed according to NAM’s
in the investment process occurred.
Investment Grade Corporate Strategy. Prior to 12/31/14, the
composite consists of a proprietary seed account funded
Past performance is no guarantee of future results. Actual
by Nuveen Investments and Direct Advisory Institutional
results may differ from composite results depending upon the
Accounts. This composite does not contain any accounts in a
size of the account, investment objectives and restrictions, the
spearately managed accounts program. The inception date
amount of transaction and related costs, the inception date of
is 5/31/12. The minimum asset size for this composite is
the account and other factors. All investments carry a certain
$200,000.
degree of risk and it is important to review investment objec-
Nuveen Investments Advisers, LLC | 333 West Wacker Drive | Chicago, IL 60606 | 800.752.8700
Portfolio
Benchmark
AAA
1.21%
1.7%
AA
12.8%
12.1%
A
70.4%
37.6%
BBB
15.6%
48.7%
Reflects ratings by Moody’s, S&P and/or Fitch. If there are two
ratings for a security, the lower rating is used, while if ratings
are provided by all three agencies, the middle rating is used.
AAA, AA, A, and BBB are investment grade ratings; BB, B, CCC/
CC/C and D are below-investment grade ratings. Bonds that
are not rated by Moody’s, S&P, and/or Fitch are assigned an
equivalent rating deemed to be appropriate by Nuveen Asset
Management.
tives, risk tolerance, tax liability and liquidity needs before
choosing an investment style or manager. Debt or fixed
income securities are subject to credit risk and interest rates
risk. The value of and income generated by debt securities
will decrease or increase based on changes in market interest
rates. Credit risk refers to an issuer’s ability to make interest
and principal payments when due. Certain Information was
obtained from third party sources, which we believe to be reliable but not guaranteed for accuracy or completeness. Clients
should consult their financial advisors regarding unknown
financial terms and concepts.
Nuveen Investments Advisers, LLC (“NIA”), a registered
invest­ment adviser, provides Separately Managed Accounts
marketing services for its affiliates that are registered investment advisers, including NAM. Although there may be differences between direct institutional and separarely managed
account program accounts, NIA believes that the performance
shown is sufficiently relevant for consideration by a potential
separately managed account client. Both NIA and NAM are
registered investment advisers and affiliates of Nuveen, LLC.
This report is provided by NIA.
COMPOSITE STATISTICS
201710
2016
2015
2014
2013
201211
# of Accounts
Assets ($M)
55
$35.4
53
$32.6
39
$25.4
29
$17.0
22
$13.2
16
$9.7
10 Preliminary. Final numbers are available upon request by
contacting Nuveen Investments Advisers, LLC.
11 Partial period for 5/31/12-12/31/12.
2
AFS-NIGCORP-0317P 145481-INV-Q-07/17
Annualized Performance (As of 3/31/2017) 6,7