Dry Powder: Securities that can be liquidated on short notice to provide emergency operational funding or purchase assets. Option Adjusted Spread: Difference between a fixed-income security rate and the risk-free rate of return adjusted to take into account an embedded option. Basis Point (BPS): 1/100 of 1%. Value Bond: One selling below our estimate of intrinsic value. Sweet Spot: Sweet spot comprises securities with below-average prices and above-average yields. Yield: Annual income from the investment (dividend, interest, etc.) divided by the current market price of the investment. Yield to Worst: The lowest potential yield that can be received on a bond without the issuer actually defaulting. Derivative: A security whose pricing is derived from one or more underlying assets.
Indices: CBOE Volatility (VIX): Market estimate of expected volatility based on the midpoint of real-time S&P 500® Index option bid/ask quotes. Intended to provide instantaneous measure of how much the market thinks the S&P 500 will fluctuate in the 30 days from the time of each tick of the VIX. Bloomberg Barclays U.S. Agency: Public securities of U.S. government agencies and quasifederal corporations, and U.S.-guaranteed corporate or foreign debt. Bloomberg Barclays U.S. Mortgage-Backed Securities: Total return of fixed-rate, mortgage-backed pass-through securities of Ginnie Mae, Fannie Mae, and Freddie Mac. Bloomberg Barclays U.S. Credit Bond: Total return of dollar-denominated, publicly issued, fixed-rate corporate securities. Bloomberg Barclays U.S. Corporate High-Yield Bond: Total return of dollar-denominated, non-investment-grade, fixed-rate, taxable corporate bonds. Bank of America Merrill Lynch Corporate Master, BBB Rated: BBB rated corporate issues based on an average from Moody’s Investors Service, Standard & Poor’s and/or Fitch Ratings.
Diversification does not assure a profit or protect against a loss in a declining market.
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. Strategies discussed herein are subject to change at any time by the investment manager in its discretion due to market conditions or volatility. International and emerging markets investing is subject to certain risks such as currency fluctuation and social and political changes; such risks may result in greater share price volatility. The Brandes investment approach tends to result in portfolios that are materially different than their benchmarks with regard to characteristics such as risk, volatility, diversification, and concentration. The foregoing reflects the thoughts and opinions of Brandes Investment Partners® exclusively and is subject to change without notice.
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1Source: Bloomberg as of 12/31/2016. Past performance is not a guarantee of future results.
2Source: Federal Reserve Statistical Release Z.1 Financial Accounts of the United States. Past performance is not a guarantee of future results.
3Source: Bloomberg Barclays Indices. Past performance is not a guarantee of future results. One cannot invest in an index. U.S. Agency: Bloomberg Barclays U.S. Agency Bond; U.S. Mortgage Backed Securities: Bloomberg Barclays U.S. Mortgage Backed Securities; U.S. Credit: Bloomberg Barclays U.S. Credit Bond; U.S. Corporate High Yield: Bloomberg Barclays U.S. Corporate High-Yield Bond.
4Source: Morningstar Direct as of 3/31/2017. Category: U.S. Intermediate-Term Bond. Holdings subject to change. Although the firm's investment guidelines permit the use of derivatives (including futures, options, swaps, and structured products) in its fixed income investment strategies, the fixed income investment committee seeks to avoid these types of securities except in extraordinary situations.
5Source: Bank of America Merrill Lynch as of 12/31/16.