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TIPS

Strategy Summary
Asset Class U.S. Fixed Income
Investment Style Bottom-Up Security Selection
Portfolio Benchmark: Bloomberg Barclays US TIPS Index
Separate Account Open

Investment Process

When the "Real Yield," as reflected in TIPS is higher than that implied in the Treasury Coupon market, valuations suggest an opportunity to overweight longer maturity TIPS holdings versus shorter maturities. In such instances, BHMS may consider positioning the TIPS portfolio duration marginally longer than that of the Index.

When the "Real Yield" is below that implied in the Treasury Coupon market, valuations suggest a strategy to overweight shorter maturity issues. In such instances, BHMS may position the TIPS portfolio duration marginally shorter than that of the Index.

The "Yield Beta" (volatility of yield) is lower for TIPS versus the Treasury Coupon market, creating the basis for arbitrage opportunities among various TIPS issues. BHMS utilizes its "value" disciplines to exploit these opportunities through active management and individual security selection decisions to add incremental total return.

Portfolio Characteristics as of 9/30/2020

  Portfolio Benchmark1
Average Credit Quality AA+ AA+
Average Weighted Coupon 1.4 0.68
Average Maturity 6.93 8.37
Effective Duration (yrs) 3.78 4.73
Yield to Maturity 0.72 0.64
Current Yield 1.19 0.6
1Bloomberg Barclays US TIPS Index
Performance as of 9/30/2020
Annualized Portfolio Returns (%)

*3 Month returns are not annualized.

Disclosure

Barrow Hanley's returns are shown before investment management fees and custody expenses. Index returns do not reflect transaction costs, management fees, and other expenses. Performance is expressed in U.S. currency. Net-of-fee returns are calculated using a model fee. The model fee is based on a $100 million portfolio using our standard fee schedule.

Bloomberg Index Services Limited. BLOOMBERG® is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively "Bloomberg"). BARCLAYS® is a trademark and service mark of Barclays Bank Plc (collectively with its affiliates, "Barclays"), used under license. Bloomberg or Bloomberg’s licensors, including Barclays, own all proprietary rights in the Bloomberg Barclays Indices. Neither Bloomberg nor Barclays approves or endorses this material, or guarantees the accuracy or completeness of any information herein, or makes any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.

All institutional product information has been provided by Barrow, Hanley, Mewhinney & Strauss, LLC. Any questions about this material or requests for additional information may be made directly to the firm from the "Contact Us" link above.

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