Chief Investment Officer, Total Return at Osterweis Capital Management
Covid-19 threw investors a curve ball, leaving the fixed income markets with low treasury yields and extremely tight spreads across the investment grade spectrum (corporates and MBS). But as vaccines are distributed and growth recovers, inflation could pose a significant risk to investors given the low yield environment. Investors should be thinking about a number of questions: Is the Fed’s dovish stance creating an environment where inflation could get out of hand? Could the markets be setting up for a taper tantrum that could be more dramatic that 2013? How can you address the need for income and capital preservation in this environment?
During the presentation, Eddy Vataru, lead portfolio manager for the Osterweis Total Return Fund, will look how 2020 shaped the fixed income market and the risks to investors given the current environment. He will discuss the possible risks of the Federal Reserve’s dovish policy and the low rate environment and offer perspectives on various measures of inflation and how they can inform inflation expectations going forward. Finally, he will identify opportunities for active management of fixed income portfolios including managing duration and active sector rotation.
Eddy Vataru is chief investment officer, total return, at Osterweis Capital Management, which he joined in 2016. He is a principal of the firm, lead portfolio manager for the total return fixed income strategy, and a portfolio manager for the flexible balanced strategy. Previously, Mr. Vataru worked in senior management positions at Incapture, LLC and Citadel, LLC. Before that, he spent more than 11 years at BlackRock, formerly Barclays Global Investors (BGI), where his last position was managing director and head of U.S. Rates and Mortgages. While in this role, BGI worked with the U.S. Treasury in implementing its Agency Mortgage-Backed Securities Purchase Program, buying mortgages for the U.S. government from 2008–2009. During his career as a fixed income investor, Mr. Vataru has developed extensive experience in managing passive, active and hedge fund portfolios. He earned a BS in chemistry and economics from California Institute of Technology and an MBA from Olin Business School at Washington University in St. Louis.