Managers who regularly meet with firms that issue securitized bonds gain insights into their history, philosophy, background and financial stability. Managers that combine a qualitative review with quantitative analysis are able to break deals down to their basic components to truly understand their structure and potential risks. They remain on the lookout and hunt for opportunities without a set playbook, evolving alongside the securities they’re following.
Henry Song, CFA, is the portfolio manager of Diamond Hill Capital Management’s Short Duration Total Return and Core Bond strategies.