Identifying Candidates
Securities that are identified for careful evaluation can include
- Names reviewed by Brandes Investment Partners' equity analysts
- Securities trading at prices and/or spreads that are inconsistent with historical levels and/or Brandes’ assessment of current and anticipated values
- Securities trading at prices and/or spreads that are inconsistent with securities having similar credit and cash flow characteristics
- Securities that have recently had their spread or price move significantly
Security Evaluation
- Brandes Investment Partners' fixed income analysts conduct wide-ranging analysis, with an emphasis on:
- In-house security and credit analysis
- Third-party fixed income and equity research
- Evaluation of publicly available financial information
- Brandes’ cash flow models and valuations of issuer, if available
- The analysts present their views of the risks inherent in the security and its long-term fair value to the Brandes Fixed Income Investment Committee
Fixed Income Investment Committee
The Committee reviews and evaluates the work of the fixed income analysts and is responsible for approving securities, incorporating for each
- Fair value / intrinsic value
- Margin of safety
- Buy target
Target position sizes are established by the Committee for each strategy and portfolio. Brandes Investment Partners' fixed income analysts and the Fixed Income Investment Committee monitor holdings for developments that may alter our assessment of intrinsic value.
Sell Discipline
Securities are typically sold when
- Intrinsic value estimate is reached
- Research process identifies a better opportunity
- Assessment of intrinsic value declines, making the margin of safety (MOS) unattractive to us
- An allocation to a security can be pared back and proceeds may be directed to purchase other securities with higher MOS