Rawlin tends to be quite active in individual bond management by moving in and out of specific issues to take advantage of temporary mispricing. Although the turnover in his portfolio is sometimes quite high, he believes that by using his gut instincts he can outperform a buy-and-hold strategy. Tejada on the other hand prefers using statistical software and simulation to help him find undervalued bond issues. Rawlin believes that Tejada’s approach needs futher evaluation over a period of both falling and rising interest rates, as well as in different credit environments.
What are their strategies:
A: Rawlin : Yield Pickup. Tejada: Total return approach
B: Rawlin: sector rotation. Tejeda: Sector rotation
C: Rawlin: total return approach. Tejada: Yield pickup
Source: Schweser 2012 vol II, Exam 3 afternoon. Question 35