Inflation-Indexed Fixed Income

Pure-play, active strategy for strategic inflation protection

Strategy Objectives

Our portfolios aim to provide inflation protection and deliver returns in excess of passive alternatives. We have built a diversified set of pure-play, actively-managed strategies seeking to capture extra return in the TIPS market. Our strategies identify and exploit repeatable patterns and other forms of market inefficiencies.

Investment Principles

  • Pure-play active management
  • Research-informed decisions
  • Long-term perspective
  • Discipline and patience

Our results since the inception of the market in 1997 support our belief in a pure-play, active management approach to TIPS.



Investment Process

We use the following set of diversified set of pure-play, actively-managed strategies to seek excess returns.

 

Fundamental Strategies

  • Real Yield Duration
  • Real Yield Slope vs. Nominal Yield Slope

Non – Directional Strategies

  • Roll-Down
  • Auction Cycle Trading
  • Seasonal Pattern
  • Deflation Floor
  • Index Pattern

Opportunistic Strategies

  • Nominal Bonds – Breakeven
  • Non-Dollar linkers

Underlying our strategies, a research process identifies repeatable patterns and other forms of market inefficiencies. Our portfolios concentrate on a small number of securities.

We measure and manage the risk of our U.S. TIPS Strategy relative to the benchmark, adhering to preset duration contribution limits for individual trading strategies and in aggregate. Exposures are assigned in a diversified fashion to avoid dependence on any single strategy.

We ensure both a well-controlled trading platform and compliance with client guidelines through a comprehensive enterprise risk management framework that includes an automated front-end trading system, independent senior management compliance oversight, and formal weekly portfolio reviews.  

What Makes Us Different?

  • Pure-Play: Active management implemented in the U.S. TIPS market without the use of credit exposure.
  • Team Continuity: Our TIPS Portfolio Management team has been together for more than 10 years, accumulating decades of combined tenure at BBH.
  • Risk Management: Our risk management framework has allowed us to meet our return objectives at below-market risk levels.
 

How to Invest

Our Inflation-Indexed Fixed Income can be accessed through a variety of investment vehicles. To learn more please contact a member of our institutional relationship management team.
 
 

John Ackler

Managing Director
New York City, NY | USA

As a Fixed Income Product Specialist, John Ackler is responsible for overseeing many of the firm’s US institutional fixed income client and consultant relationships. John also participates in…  Learn More

Our Team

Our Latest Insights

Performance and Portfolio Characteristics

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Composite Performance as of 12/31/2023

BBH Inflation-Indexed Fixed Income Composite

Total Returns Average Annual Total Returns
Composite/Benchmark
3 Mo.
YTD
1 Yr.
3 Yr.
5 Yr.
10 Yr.

Since Inception

(04/01/1997)

BBH Inflation-Indexed Fixed Income Composite
(Gross of Fees)
4.57% 3.60% 3.60% -1.06% 3.09% 2.49% 5.09%
BBH Inflation-Indexed Fixed Income Composite
(Net of Fees)
4.54% 3.45% 3.45% -1.21% 2.93% 2.34% 4.93%
Bloomberg US TIPS
4.71% 3.90% 3.90% -1.00% 3.15% 2.42% 4.76%

Past performance does not guarantee future results.

Bloomberg U.S. TIPS Index includes all publicly issued, U.S. Treasury inflation-protected securities that have at least one year remaining to maturity, are rated investment grade, and have $250 million or more of outstanding face value. This index is not available for direct investment.

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Portfolio Characteristics as of 12/31/2023

BBH Inflation-Indexed Fixed Income

Benchmark
Effective Duration
6.88
6.65
Yield to Maturity
4.19%
4.20%

Portfolio holdings and characteristics are subject to change.

Portfolio Characteristics are of the Representative Account. The Representative Account is managed with the same investment objectives and employs substantially the same investment philosophy and processes as the strategy.

Gross of fee performance results for this composite do not reflect the deduction of investment advisory fees. Actual returns will be reduced by such fees. Net of fees performance reflects the deduction of the maximum investment advisory fees.  Returns include all dividends and interest, other income, realized and unrealized gain, are net of all brokerage commissions, execution costs, and without provision for federal or state income taxes. Performance is calculated in U.S. dollars.

The BBH Inflation-Indexed Fixed Income Strategy was previously called the BBH Inflation-Indexed Securities Strategy.

Effective duration is a measure of the portfolio’s return sensitivity to changes in interest rates.

Yield to Maturity is the rate of return the portfolio would achieve if all purchased bonds and derivatives were held to maturity, assuming all coupon and principal payments are received as scheduled and reinvested at the same yield to maturity. This figure is subject to change and is not meant to represent the yield earned by any particular security. Yield to Maturity is before fee and expenses.

This communication is for informational purposes only and does not constitute an offer or a solicitation to buy or sell any particular security or to adopt any specific investment strategy. The information herein has not been based on a consideration of any individual investor’s circumstances and is not investment advice, nor should it be construed in any way as tax, accounting, legal or regulatory advice.  Any views and opinions are subject to change at any time.

Strategies are shown without regard to whether they are offered as separately managed account mandates or through pooled vehicles.  Any discussion of or reference to any given strategy herein should not be taken as a recommendation or solicitation of any pooled vehicle which has an investment objective featuring or similar to such strategy.

This material does not constitute an offer or solicitation in any jurisdiction where or to any person to whom it would be unauthorized or unlawful to do so.

“Bloomberg®” and the Bloomberg U.S. TIPS Index are service marks of Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited (“BISL”), the administrator of the index (collectively, “Bloomberg”) and have been licensed for use for certain purposes by Brown Brothers Harriman & Co (BBH). Bloomberg is not affiliated with BBH, and Bloomberg does not approve, endorse, review, or recommend the BBH Inflation-Indexed Fixed Income Strategy. Bloomberg does not guarantee the timeliness, accurateness, or completeness of any data or information relating to the strategy.

Risk Considerations

There is no assurance that a portfolio will achieve its investment objective or that the strategy will work under all market conditions.  The value of the portfolio can be affected by changes in interest rates, general market conditions and other political, social and economic developments.  Each investor should evaluate their ability to invest for the long-term, especially during periods of downturn in the market.

Investing in the bond market is subject to certain risks including market, interest-rate, issuer, credit, maturity, call and inflation risk; investments may be worth more or less than the original cost when redeemed.  Bond prices are sensitive to changes in interest rates and a rise in interest rates can cause a decline in their prices.

Foreign investing involves special risks including currency risk, increased volatility, political risks, and differences in auditing and other financial standards.

The strategy may also invest in derivative instruments, investments whose values depend on the performance of the underlying security, assets, interest rate, index or currency and entail potentially higher volatility and risk of loss compared to traditional stock or bond investments.

NOT FDIC INSURED ● NO BANK GUARANTEE ● MAY LOSE VALUE

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You are required to read the following important information, which, in conjunction with the Terms and Conditions, governs your use of this website. Your use of this website and its contents constitute your acceptance of this information and those Terms and Conditions. If you do not agree with this information and the Terms and Conditions, you should immediately cease use of this website. The contents of this website have not been prepared for the benefit of investors outside of the United States. This website is not intended as a solicitation of the purchase or sale of any security or other financial instrument or any investment management services for any investor who resides in a jurisdiction other than the United States1. As a general matter, Brown Brothers Harriman & Co. and its subsidiaries (“BBH”) is not licensed or registered to solicit prospective investors and offer investment advisory services in jurisdictions outside of the United States. The information on this website is not intended to be distributed to, directed at or used by any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. Persons in respect of whom such prohibitions apply must not access the website.  Under certain circumstances, BBH may provide services to investors located outside of the United States in accordance with applicable law. The conditions under which such services may be provided will be analyzed on a case-by-case basis by BBH. BBH will only accept investors from such jurisdictions or countries where it has made a determination that such an arrangement or relationship is permissible under the laws of that jurisdiction or country. The existence of this website is not intended to be a substitute for the type of analysis described above and is not intended as a solicitation of or recommendation to any prospective investor, including those located outside of the United States. Certain BBH products or services may not be available in certain jurisdictions. By choosing to access this website from any location other than the United States, you accept full responsibility for compliance with all local laws. The website contains content that has been obtained from sources that BBH believes to be reliable as of the date presented; however, BBH cannot guarantee the accuracy of such content, assure its completeness, or warrant that such information will not be changed. The content contained herein is current as of the date of issuance and is subject to change without notice. The website’s content does not constitute investment advice and should not be used as the basis for any investment decision. There is no guarantee that any investment objectives, expectations, targets described in this website or the  performance or profitability of any investment will be achieved. You understand that investing in securities and other financial instruments involves risks that may affect the value of the securities and may result in losses, including the potential loss of the principal invested, and you assume and are able to bear all such risks.  In no event shall BBH or any other affiliated party be liable for any direct, incidental, special, consequential, indirect, lost profits, loss of business or data, or punitive damages arising out of your use of this website. By clicking accept, you confirm that you accept  to the above Important Information along with Terms and Conditions.

 
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