Stratton Street is a London based fund management and advisory company founded in August 2000, specialising in fixed income markets.
Rather than divide the world between developed and emerging markets, at Stratton Street we believe it makes more sense to separate creditors from debtors.
Net foreign assets as proportion of GDP (2011)
Source: Stratton Street Capital LLP calculations
Countries are screened by their ability to repay debt, using Stratton Street’s net foreign assets (NFA) model, and then credits are evaluated based on value for money and fundamentals of the credit. We see this as a return to fundamentals of credit analysis for fixed income, rather than the indexed approach used by most other funds which encourages lending to heavily indebted countries like Greece and Ukraine.
Investing in fixed income based on index weights simply means having to buy more of a country or company’s debt as it becomes more indebted. Our approach screens out the countries that are dangerously indebted, so our funds have never invested in Greece, Spain, Portugal or Ukraine. Instead we have invested in the wealthy countries that in net terms are creditors internationally, not debtors. These countries include Germany, China, Norway, the Netherlands, Abu Dhabi, Qatar and Korea.