A 30-minute listen.

Sitting down with long-time industry peer and Octo member Richard Philbin,  Janus Henderson’s John Pattullo talks through what it takes to properly asset allocate across the spectrum of fixed income, including fixed and floating rate debt. He chats through his partnership with co-manager Jenna Barnard, the differences in the income and strategic strategies they run, and why Richard Koo and Larry Summers drive their macro thinking.

John and Jenna run £7bn in assets across strategic and income strategies and John starts by discussing the differences between them, what ‘genuine’ strategic asset allocation should actually look like, and how these strategies will naturally diverge and converge through the cycle.

He goes on to explain why they subscribe to economists Larry Summers’ & Richard Koo’s view of the world, which smashes traditional ‘Philips curve’ economics to say interest rates will remain very low for a very long period of time, and explaining their long-duration position.

“We are big fans of genuine strategic asset allocation, which includes duration / interest rate sensitivity.” – “If you want to add value, you have to allocate right across the spectrum of bonds, credit and loans; globally, in many jurisdictions.”

He then discusses how him and Jenna set the macro agenda and his team picks stocks within this framework, and why they ‘want to invest in companies that don’t want to borrow’.

Also discussed is the European macro, potential ‘fallen angels’, loans, and the importance of looking at net issuance.