Payden & Rygel believes that bonds play a special and important role in an overall asset allocation by generating reliable current income and by providing a diversification benefit to other higher volatility assets in the portfolio. We strive to act as a requisite diversifier in the context of the total pension plan.

With the ever-increasing blurring between asset classes, we expect to deliver return and volatility characteristics in keeping with the spirit of bond expectations. We believe that bond portfolios should be sufficiently diversified across a broad spectrum of sectors and that individual position sizes in the portfolio should be calibrated to their potential degree of risk.

In addition to the strategies listed below, we offer a complete array of services including index replication strategies and liability-driven investing.

Our Intermediate Core Bond strategy strikes a compromise between yield on the one hand and price volatility on the other. This strategy offers a slightly lower yield than other core bond alternatives due to its shorter average maturity that helps protect against adverse price moves in a rising interest rate environment. The strategy generally invests in securities with maturities in the one to 10-year range, and includes sectors such as Treasuries, Agencies, investment-grade corporate bonds and asset-backed and mortgage-backed securities.

Benchmark	Barclays Capital US Intermediate Government/Credit Index, Barclays Capital US Intermediate Aggregate Bond Index
Securities Employed	Treasuries, Agencies, mortgages, asset-backed securities, corporates, non-dollar
Maturity Range	0 - 10 years
Duration Range	2.0 - 4.5 years
Average Credit Quality	AAA / AA

The Core Bond strategy exploits opportunities across maturities and sectors in the investment grade universe. The strategy generally invests in securities with maturities in the one to 30-year range and includes sectors such as Treasuries, Agencies, investment-grade corporates and asset-backed and mortgage-backed securities.

Benchmark	Barclays Capital US Aggregate Bond Index
Securities Employed	Treasuries, Agencies, mortgages, asset-backed securities, corporates, non-dollar
Maturity Range	1 - 30 years
Duration Range	3.0 - 5.5 years
Average Credit Quality	AAA

Our Core Plus strategy combines sectors used in the core strategy with the extended markets of high-yield, emerging markets and non-dollar bonds. They are used opportunistically as market conditions warrant and may represent as little as zero percent of the portfolio, but a more typical allocation is in the 10-20% range. This strategy has grown steadily over the past several years, spurred by advancements in information technology, which have increased transparency and trading efficiencies in these sectors, and the dramatic increase of debt issuance in local markets around the world.

Benchmark	Barclays Capital US Aggregate Bond Index, Custom Benchmarks
Securities Employed	Treasuries, Agencies, mortgages, asset-backed securities, corporates, high yield, emerging markets, non-dollar
Maturity Range	1 - 30 years
Duration Range	3.0 - 5.5 years
Average Credit Quality	AA / A