Approach
The Voya Strategic Income strategy employs an unconstrained, multi-sector fixed income strategy focused on maximizing total return by seeking risk-adjusted opportunities across the globe.
Portfolio Details
Invests across the global fixed income universe via individual securities and completion vehicles. Sectors include investment grade corporates, U.S. Treasuries and agencies, senior bank loans, high yield bonds, securitized credit, and emerging market debt.- Maximum 50% total allocation to completion vehicle; typically used to gain diversified exposure to less accessible sectors, including senior loans, emerging markets debt, and securitized credit
- Maximum 50% total allocation to below investment grade corporates; helps limit the strategy's credit risk and correlation to equity
- Portfolio's duration will range between 2 to 4 years
Investment Process
Supported by a seasoned team of fixed income professionals, our three-step process leverages the collective insights from across Voya’s Fixed Income platform, incorporating both top-down and bottom-up research insights. First, the Investment Committee establishes the macro view and assesses the current risk regime. This assessment includes an estimate of "achievable alpha", which in turn influences the team’s recommended risk posture. Next, the Multi-Sector Portfolio Management team discusses the investment themes and target risk profile to construct a model portfolio incorporating the strategy’s guidelines and objectives. Finally, individual sector teams are then responsible for identifying and trading specific bonds.
Investment Philosophy
We believe an unconstrained fixed income strategy should provide a more stable and resilient long-term investor's experience.
- Focused on maximizing risk-adjusted returns by using flexibility to avoid prevailing market risks
- Unconstrained approach to portfolio construction, not unconstrained risk
- Security selection and sector allocation are primary drivers of return; limited use of duration and currency positioning to mitigate volatility
- Aim to maintain low correlations to global interest rates/traditional fixed income and volatile equity markets
- Leverages robust and collaborative macro process coupled with industry leading security selection by each individual sector team
Performance
Performance
| As of 10/31/24 | 1 Month | 3 Month | YTD | 1yr | 3yr | 5yr | 10yr | Since Inception (3/01/18) |
|---|---|---|---|---|---|---|---|---|
| Gross | -0.68 | 1.35 | 4.54 | 8.75 | 1.41 | 1.94 | - | 2.59 |
| Net | -0.81 | 0.97 | 3.25 | 7.15 | -0.09 | 0.27 | - | 0.83 |
| Index* | -0.82 | 1.54 | 5.02 | 10.32 | 1.80 | 2.52 | - | 3.17 |
* Strategic Income SMA Custom Index
Past performance does not guarantee future results.
Periods greater than one year are annualized. Performance data is considered final unless indicated as preliminary. Monthly performance is based on full GIPS Composite returns. Access the GIPS page for full composite details.
"Gross Returns" are presented before the deduction of transaction costs and should be used as Supplemental Information only. "Net Returns" are calculated by subtracting a hypothetical maximum total wrap fee (estimated at 1.50% per annum) from the monthly "pure" gross-of-fee returns. For periods from January 2007 to June 2021 the hypothetical maximum fee was 2.00% per annum. The total wrap fee includes transaction costs, portfolio management, investment advisory, custodial and other administrative costs. Wrap fees vary amongst brokerage firms and may be negotiated based on account size and other factors. The hypothetical maximum total wrap fee used is deemed to be the maximum fee charged to any composite account but we cannot guarantee accuracy. More information about fees can be found in the Form ADV Part II of Voya Investment Management Co.
Literature
Voya Strategic Income SMA Quarterly Commentary
Date: September 30, 2024
Approved For: Public Use Material
Voya Strategic Income SMA Representative Account
Date: January 27, 2024
Approved For: Financial Professional Use Only
Investment Team
Rajen Jadav, CFA
Portfolio Manager
Years of Experience: 27
Years with Voya: 5
Sean Banai, CFA
Head of Multi-Sector
Years of Experience: 25
Years with Voya: 25
Randy Parrish, CFA
Head of Public Credit
Years of Experience: 34
Years with Voya: 23
Disclosures
Principal Risk
The strategy employs a quantitative investment process. The process is based on a collection of proprietary computer programs, or models, that calculate expected return rankings based on variables such as earnings growth prospects, valuation, and relative strength.
Data imprecision, software or other technology malfunctions, programming inaccuracies and similar circumstances may impair the performance of these systems, which may negatively affect performance. Furthermore, there can be no assurance that the quantitative models used in managing the strategy will perform as anticipated or enable the strategy to achieve its objective.
The principal risks are generally those attributable to bond investing. Holdings are subject to market, issuer, credit, prepayment, extension, and other risks, and their values may fluctuate. Market risk is the risk that securities may decline in value due to factors affecting the securities markets or particular industries. Issuer risk is the risk that the value of a security may decline for reasons specific to the issuer, such as changes in its financial condition. The strategy may invest in mortgage-related securities, which can be paid off early if the borrowers on the underlying mortgages pay off their mortgages sooner than scheduled. If interest rates are falling, the strategy will be forced to reinvest this money at lower yields. Conversely, if interest rates are rising, the expected principal payments will slow, thereby locking in the coupon rate at below market levels and extending the security’s life and duration while reducing its market value. High yield bonds carry particular market risks and may experience greater volatility in market value than investment grade bonds. Foreign investments could be riskier than U.S. investments because of exchange rate, political, economics, liquidity, and regulatory risks. Additionally, investments in emerging market countries are riskier than other foreign investments because the political and economic systems in emerging market countries are less stable.