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Loomis, Sayles & Company

Full Discretion

We are high-conviction, active credit investors focused on results for our clients.

Our Philosophy

We have a legacy of independent thinking and leaning into the market when others may be pulling away. We take a deep-value, equity-like approach to credit selection across global fixed income markets. Our disciplined process helps gives us confidence in seeking to identify macro trends, formulate a clear view on market sectors, and invest throughout the credit cycle.

For more than 40 years, we have been applying our distinctive style of bond picking to deliver portfolios designed to provide excess yield potential and have low correlations to traditional benchmark-focused fixed income strategies.

 

Frozen, frothy, and everything in between.

The Full Discretion Approach to Credit Selection

During our decades as bond investors, we’ve managed through all sorts of credit conditions. And we have
consistently observed that the market is inefficient at pricing specific risk.


We use repeatable credit selection strategies to capitalize on this persistent inefficiency and drive excess return potential.

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MAY 13, 2024

Extra Credit

Since the Federal Reserve (Fed) signaled the end of its hiking cycle in the fourth quarter of 2023, corporate spreads have compressed and are now approaching cycle lows. Demand for yield has kept investment grade and high yield corporate spreads stable even as elevated inflation readings, robust employment gains and steady consumer spending have prolonged the Fed’s rate cutting cycle and put upward pressure on the US Treasury curve. In our view, resilient US growth has tempered the risk of a downturn, which will likely lead to an extension of the current ‘late cycle’ environment. 

FIRST QUARTER 2024

Quarterly Credit Update

Interest rates moved higher in the first quarter of 2024 based on expectations that the Federal Reserve’s (Fed’s) cutting cycle would be pushed out further (the 10-year US Treasury yield climbed 0.74% to end at 4.62%). From a credit cycle positioning standpoint, we believe we are still in the ‘late cycle’ stage.

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fIRST quarter 2024

The Case for Strategic Alpha

We believe the flexibility of an unconstrained fixed income strategy can offer investors the ability to achieve multiple investment objectives throughout the course of a cycle

FIRST QUARTER 2024

Core Plus Full Discretion: A Differentiated Approach

An extended period of low interest rates and, more recently, an increase in interest rate and spread volatility has investors re-thinking their approach to “core” fixed income strategies.

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product offerings

Full Discretion Team
Range of Institutional Strategies and Mutual Funds

The Loomis Sayles Full Discretion team were among those who pioneered multisector investing with a long-term, flexible, benchmark-agnostic approach. The team manages a range of institutional strategies and mutual funds to help meet different investor needs.

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Team Insights

Explore the recent publications from the Full Discretion team. 

 

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Yield Reset Spurs the Return of Multisector Fixed Income

Higher yields have created compelling opportunities across the full universe of fixed income sectors. As a result, we believe investors should rethink their approach to fixed income and broaden their risk factor exposure. 

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Bank Loans: Looking Beyond Interest Rate Expectations

Investment Director Cheryl Stober outlines the potential advantages and risks of bank loan investing and the roles that a bank loan allocation can play in a fixed income portfolio. 

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Asset TV Fixed Income Masterclass:
FOMO in Credit Markets

How are corporate fundamentals, demand technicals and discount dollar prices playing out in the investment grade bond market? Portfolio Manager Brian Kennedy weighs in.  

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Are Conditions Constructive for Credit?

We believe that lower growth and inflation can support credits, but selectivity is key at this phase of the cycle. Learn more from Brian Kennedy, Portfolio Manager and Chris Romanelli, Associate Portfolio Manager and Strategist. 

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Bank Loans Outlook: On Firm Footing

Investment Director Cheryl Stober shares her team's expectations for defaults, supply/demand technicals and bank loan return potential in 2024. 

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Extra Credit: 'EV’ is the Future, and We Don't Mean Electric Vehicles

20 December 2023

When it comes to portfolio construction, the Full Discretion team has long employed a combination of bottom-up security selection and top-down, macroeconomic analysis. We utilize a credit cycle framework to evaluate the factors driving the cycle, anticipate broad sector mispricings and seek to take advantage of changes in risk premium at every stage. This process helps us identify the risk drivers we want to emphasize, or seek to avoid, in our portfolios and lays the foundation for our overall risk assessment. Enterprise value is the anchor by which we conduct our bottom-up fundamental analysis.

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Core Plus Bond Fund & Investment Grade Bond Fund Highlights

The Full Discretion and Relative Return teams both utilize a credit cycle framework and input from Loomis Sayles research analysts, including credit, securitized and macro, to help inform their respective investment decisions; however, their processes are distinct, resulting in differentiated performance objectives and outcomes. 

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Rethinking The Fixed Income Playbook For Insurers

The last ten months have shaken the traditional core fixed income playbook. We think it's time to consider a more thoughtful approach to fixed income allocations in insurance portfolios.

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In Case You Missed It: A Conversation With Full Discretion's Portfolio Managers

On December 9, 2020, Full Discretion portfolio managers Elaine Stokes, Matt Eagan and Brian Kennedy joined Jim Sia, Head of Relationship Management, for a live call with institutional clients and consultants to discuss Dan Fuss’ step back from portfolio management, the deep investment resources of the Full Discretion team, and the team’s outlook going into 2021. 

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Credit Check: The Full Discretion Approach To Credit Selection

Credit markets are frequently moving. During our decades as bond investors, we’ve seen them frozen during times of crisis, frothy when investors have seemed desperate for yield, and everything in between.

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Matt Eagan's LinkedIn Articles

Explore the deep-dive articles written by Matt Eagan on LinkedIn.

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“Covenant-Lite” Loans:
Credit Quality Is Still the Dominant Factor

The Bank Loans Team is often asked about covenant-lite loans. The team shares their views on what they are and are not.
MEET THE TEAM

Explore More of the Full Discretion Team Members.

Meet the 30 investment professionals whose experience and expertise help drive alpha across Full Discretion strategies

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Call it art or call it a philosophy; we consider it to be both. Fundamental research is the cornerstone of everything we do and believe in. 

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Matt Eagan
Portfolio Manager and Head of the Full Discretion Team
Questions for the team?

Let's Connect.

David Zielinski, CFA

Investment Director

Cheryl Stober

Investment Director

Kristen Doyle

Associate Investment Director

Recent Blog Posts fROM LOOMIS SAYLES

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Disclosure

Any opinions or forecasts contained herein reflect the current subjective judgments and assumptions of the Full Discretion Team only, and do not necessarily reflect the views of Loomis, Sayles & Company, L.P. This information is subject to change at any time without notice.

Market conditions are extremely fluid and change frequently.

Any investment that has the possibility for profits also has the possibility of losses, including the loss of principal.

Commodity, interest and derivative trading involves substantial risk of loss.

Diversification does not ensure a profit or guarantee against a loss.

Past performance is no guarantee of, and not necessarily indicative of, future results. 

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