Total Return Fixed Income

Philosophy and Process I Strategies I Team

Fixed income investment philosophy

• The fixed income market is frequently inefficient; a bottom-up, fundamental research approach that identifies mispriced securities consistently produces superior results

• Investment professionals with expertise in both security selection and sector relative value analysis are best equipped to identify mis-priced securities

• Interest rate anticipation is not highly compensated and is de-emphasized in our process

• Active risk management is critical at the security level, and when combined with risk controls in portfolio construction, enhances risk-reward tradeoffs and management of tracking error

Fixed income investment process

Security selection (55-70%)

• Focus on relative value, marrying opportunity and risk
• Use Initial Filter Screen tool and proprietary research systems
• Manage position relative to benchmark security weightings

Sector allocation (15-25%)

• Sector weightings accentuate security selection and differ from benchmark
• Initial relative valuation based on historic spread relationships

Portfolio risk adjustments (5-15%)

• Tactical credit and convexity mismatch

Interest rate positioning (0-10%)

• Avoid short-term interest rate trading
• Restrict duration deviation exposure

Philosophy and Process I Strategies I Team

Fixed income strategies

Mortgage Securities
The objective of the Advantus Mortgage Securities Fixed Income strategy is to outperform the Lehman

Brothers U.S. Mortgage-Backed Securities Index over the long term and maintain a competitive position in our peer universe.

Full Duration
The objective of this core fixed income strategy is to outperform the Lehman Brothers Aggregate Bond Index over the long term and maintain a competitive position in our peer universe. This is our core fixed income strategy.

Intermediate Duration
The objective of the Advantus Intermediate Duration Fixed Income strategy is to outperform the Lehman Brothers Intermediate U.S. Bond Government/Credit Index over the long term and maintain a competitive position in our peer universe.

Short Duration
The objective of the Advantus Short Duration Fixed Income strategy is to outperform the Lehman Brothers Short Treasury 9-12 Month Index.

Long Duration
The objective of the Advantus Long Duration Fixed Income strategy is to outperform the Lehman U.S. Long Government/Credit Index over the long term and maintain a competitive position in our peer universe.

Core Plus
The objective of our Core Plus Fixed Income strategy is to outperform the Lehman Aggregate Bond Index over the long term and maintain a competitive position in our peer universe.

Philosophy and Process I Strategies I Team

Fixed income team

Fixed income portfolio managers
» Chris Sebald, CFA
» Tom Houghton, CFA
» David Land, CFA

Fixed income credit research professionals
» David Kuplic, CFA
» John Leiviska, CFA
» Erica Bergsland, CFA
» Steven Lane, CFA
» Robert Thompson, CFA
» James Geiger, CFA
» James Tobin, CFA
» Joseph Scanlan, CFA
» Sean Timonen

Real estate and structured finance research professionals
» Sean O’Connell, CFA
» David Schultz, CFA
» James Ziegler
» James Kragenbring, CFA
» Jon Thompson, CFA
» Stephen Thompson
» Lena Harhaj, CFA

Philosophy and Process I Strategies I Team