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Strategy Overview

The Global Government Bond strategy seeks global sovereign bond investments offering the best combination, in our view, of high real yield and attractive fundamentals given our macroeconomic outlook. Our goal with this value-based, investment-grade strategy is to unlock the potential benefits of mean-reversion tendencies in interest rates and currency valuations. The strategy primarily invests in developed market debt. To seek to avoid the inefficiencies of global bond benchmarks, the team takes a benchmark-agnostic approach that limits investment to the 10-20 countries and currencies believed to be most attractive. For over two decades, the Global Fixed Income team has achieved its risk-adjusted returns by implementing a process of country rotation through the broad global fixed income universe.

 

Strategy Profile

 

 

Key Stats*

Strategy AUM 1 $61.7
Inception Date June 1, 2024
Current Yield (%) 4.53

Philosophy

Objective

The strategy seeks to generate long term return and consistent alpha. We strive to capture interest income and additionally generate principal growth through capital appreciation when market conditions permit.

Universe

The investible universe focuses predominantly on developed market sovereign debt and currencies and select emerging market debt and currencies. All investments shall be investment-grade quality at time of purchase. Emerging markets are defined by JPMorgan GBI-EM Global Diversified Index.

Investment Process Summary

We apply a top-down, value-driven process when structuring Global Fixed Income portfolios. Real (inflation-adjusted) yield is our primary measure of bond value. Currency valuation is also important, as the real yield must be captured in the investor's local currency (dollars for U.S. investors and euros for many of those in Europe, for example). We focus on appreciating, undervalued currencies and hedge overvalued currencies that we believe may decline. Inflation trends, political risks, monetary trends, and business cycle and liquidity measures are also considered. We typically concentrate investments in 10-20 countries that, in our opinion, offer the best total return potential.

Duration Management

We concentrate investments where we believe value is greatest; as a result, our portfolios tend to have an intermediate- to long-duration bias when real interest rates are high. Greater interest rate exposure is assumed in countries with more value and positions are established along the yield curve where we find the best risk/reward profile. Portfolio duration ranges +/- 4 years to the index.

Country Rotation

We believe that concentrating investments in the markets that we consider to have the highest potential returns — that is, taking above-average country risk — reduces overall risk. Secular trends, political and monetary conditions, and business cycle risks are considered in determining the likelihood that we can capture the value we see in real interest rates and currencies. Each factor contributes to our country weighting decisions.

Currency

Currency and country decisions are intertwined. We seek to invest in bonds with high real yields that are denominated in appreciating currencies. We hedge our currency exposure in countries with high real rates but overvalued currencies.

Issue Selection

Within the desired country and currency, security selection is based on yield-curve analysis and desired duration.

At a Glance

  • Primary Benchmark: FTSE World Government Bond Index (Hedged) or other global sovereign bond benchmark, as specified by client direction

  • Real yield is our primary measure of value, followed closely by currency valuation. Inflation, monetary trends, political risks, the business cycle, and liquidity measures are also considered

  • Efficient duration management and country rotation (driven primarily by currency considerations) add incremental value

  • Investments are typically concentrated in 10-20 countries deemed to have the best total return potential

Portfolio Managers

Jack P. McIntyre, CFA

Portfolio Manager

Anujeet Sareen, CFA

Managing Director & Portfolio Manager

Paul Mielczarski

Head of Global Macro Strategy & Portfolio Manager

Carol Lye‡

Portfolio Manager & Senior Research Analyst

View Full Fixed Income Team

Performance*

  • Annualized Returns
  • Calendar Year Returns
  • GIPS Statistics

Annualized Returns

Annualized Returns

As of 12/31/2025

Chart

Bar chart with 3 data series.
The chart has 1 X axis displaying categories.
The chart has 1 Y axis displaying values. Data ranges from 0.68 to 6.21.
End of interactive chart.
Period
Gross (%)*
Net (%)*
WGBI (H USD) (%)
QTD1.401.250.68
YTD6.215.583.79
1 Year6.215.583.79
Since Inception5.194.564.81

Calendar Year Returns

Calendar Year Returns

As of 12/31/2025

Period
Gross (%)*
Net (%)*
WGBI (H USD) (%)
20256.215.583.79
20242.021.673.81

GIPS Statistics

GIPS Statistics

As of 12/31/2025

Year or YTD
# of Accts
Market Value ($MM)
Firm Assets ($MM)
Composite Dispersion (%)
Composite St. Dev. (% 3-Year Rolling)
WGBI (H USD) St. Dev. (% 3-Year Rolling)
202514859,981---
202416658,892---

Characteristics*

  • Portfolio Characteristics
  • Quality Allocation
  • Duration Allocation
  • Region & Currency

Portfolio Characteristics

Portfolio Characteristics

As of 12/31/2025

Characteristic
Brandywine Global
WGBI (H USD)
Avg. Quality 2AA-
Avg. Maturity (Years)8.529.32
Avg. Effective Duration (Years)4.436.72
Avg. Coupon (%)4.362.70
Current Yield (%)4.53-
Avg. Yield-to-Maturity (%)4.673.28
Number of Issues181,339

Quality Allocation

Quality Allocation

As of 12/31/2025

Quality Rating
Brandywine Global (%)
AAA3.7
AA84.5
BBB8.3
BB or Lower3.5

Duration Allocation

Duration Allocation

As of 12/31/2025

Duration Range
Brandywine Global (%)
<1 Year48.2
3-7 Years23.7
7-10 Years13.7
10+ Years12.6
No Duration1.7

Region & Currency

Region & Currency

As of 12/31/2025

Region
Country (%)
Currency (%)
WGBI (H USD) (%)
Asia-Pacific ex-Japan1.70.812.5
Emerging Markets11.85.61.9
Europe ex-Eurozone20.60.85.9
Eurozone--2.926.8
Japan--8.8
Middle East & Africa--0.4
North & Central America66.195.743.7
South America---
Supranational---
Other-0.3--

Videos

Global Macro Overview

4th Quarter 2025 | January 16, 2026

Head of Global Macro Strategy & Portfolio Manager Paul Mielczarski discusses his macroeconomic outlook and where he sees opportunities.

Download Slides | Read Transcript

Paul Mielczarski

Head of Global Macro Strategy & Portfolio Manager

Investment Options

Available Investment Options

Global Government Bond
Separate Accounts
FTGF Brandywine Global Fixed Income Fund
Cross-Border Irish Funds
1
The Firm's AUM includes Diversified Value Equity non-discretionary assets of $289.8M and Fundamental Equity non-discretionary assets of $3,830.0M, both of which are reported on a one-month lag.

2
The "Blended Weighted Average Credit Quality Rating" is determined as follows: in line with the methodology used by Bloomberg Global indices, the middle rating from the three major NRSROs (S & P, Moody's, and Fitch) will be assigned to each security. In the event that ratings are provided by only two agencies, the lowest rating will be assigned. If only one agency assigns a rating, that rating will be applied. If the security is not rated by one of the three major agencies, U.S. treasuries and certain U.S. agencies are given the U.S. issuer rating. Sovereign treasuries are given the sovereign issuer rating. All other unrated securities are given an internal rating following the credit ratings procedures. The equivalent numerical rating is assigned to each security based on the Security Level scale. A Portfolio Level scale is applied on the weighted average calculation to round for fractional numerical ratings and then converted to an alpha weighted average rating. Cash is included and received the highest rating.

‡ The Brandywine Global Singapore-based team is a division of Templeton Asset Management Ltd, a company incorporated in Singapore.

Data is obtained from Bloomberg (©2026, Bloomberg Finance LP) and is believed to be accurate and reliable.

*Supplemental information to the attached Global Government Bond GIPS Report, which provides gross and net performance of the named strategy and a detailed description of the performance calculation methodology, index descriptions, and other disclosures. Gross performance returns include transaction costs but do not reflect the deduction of Brandywine Global's management fee. Net performance is calculated using a model approach whereby we use the highest tier of the appropriate strategy's fee schedule as disclosed in Part 2A of the Firm's Form ADV. All performance results are presented before custody charges, withholding taxes and other indirect expenses. Performance results of the named strategy are presented gross and net of management fees. Brandywine Global characteristics were derived using a representative account of the named strategy. In most cases, representative account and composite performance and characteristics will vary slightly. Investment objectives are aspirational in nature, inherently uncertain, and should not be regarded as a guarantee of future performance. Past performance is no guarantee of future results.

Inception Date: June 1, 2024

WGBI (H USD) = FTSE World Government Bond Index Hedged USD (USD)

Returns shown in USD

Brandywine Global Investment Management, LLC (the "Firm") is a wholly owned, independently operated, subsidiary of Franklin Resources, Inc. Brandywine Global Investment Management, LLC claims compliance with the Global investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Brandywine Global Investment Management, LLC has been independently verified for the periods January 1, 1993 through June 30, 2024. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm's policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. The Global Government Bond Composite has had a performance examination for the periods June 1, 2024 through June 30, 2024. The verification and performance examination reports are available upon request. Policies for valuing investments, calculating performance, and preparing GIPS Reports are available upon request. Disclosed total firm assets represent the total market value of all discretionary and nondiscretionary, fee-paying and non-fee-paying assets under the Firm's management. GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein. The Global Government Bond (the Composite) Inception date: June 1, 2024. Creation date: July 30, 2024. The Composite includes all fully discretionary, fee-paying, actively managed Global Government Bond accounts with no minimum market value. The strategy invests primarily in government debt and government related securities. The strategy seeks to outperform the investment benchmark on an average annual basis, over rolling five-year periods. Given the USD hedged benchmark, the strategy will have a higher percentage of assets invested in US dollar denominated securities/instruments or in foreign securities/instruments partially or fully hedged to the US dollar. Some exposures may be accomplished through derivatives. The investment strategy maintains a high-quality, investment-grade profile. The FTSE WGBI measures the performance of developed countries' global fixed income markets invested in debt issues of U.S. and non-U.S. governmental entities hedged in United States Dollar. Preliminary data, if so noted, reflects unreconciled data for the most recent reporting period. Portfolios are valued daily on a trade date basis and include dividends and interest as well as all realized and unrealized capital gains and losses. Return calculations at the portfolio level are time-weighted to account for periodic contributions and withdrawals. Performance results are calculated on a before tax, total return basis. Prior to July 1, 2007, portfolios were included in the Composite beginning with the first full quarter of performance through the last full quarter of performance. After July 1, 2007, portfolios are included in the Composite beginning with the first full month of performance through the last full month of performance. Composite returns are reported on quarterly basis. The Composite returns consist of size-weighted portfolio returns using beginning of period values to weight the portfolio returns. Monthly linking of interim performance results is used to calculate quarterly and annual returns. Composite's valuations and returns are computed in U.S. Dollars ("USD"). The results are presented in USD or in other currencies (to accommodate overseas investors), the latter by converting monthly USD returns into other currency returns using the appropriate currency exchange rate returns. Gross returns reflect the deduction of trading expenses. Net-of-fees returns is calculated using a model approach whereby we use the current highest tier of the appropriate strategy's fee schedule as disclosed in the Form ADV. Composite dispersion is calculated using the asset-weighted standard deviation method for all portfolios that were in the Composite for the entire year. Composite dispersion is not presented for periods with five or fewer portfolios. The number of accounts and market values are as of the end of the period. The three-year annualized standard deviation, calculated using gross-of-fee returns, measures the variability of the composite and the benchmark returns over the preceding 36-month period. Gross-of-fees returns are used to calculate the presented risk measures. Past performance is no guarantee of future results. A complete list of composites, and limited distribution pooled funds descriptions as well as a list of broad distribution pooled funds is available upon request. The Institutional Client Separate Account Management Fee Schedule: .60% on all assets. Additional information on the Firm's fee schedule can be found in Form ADV Part 2A which is available upon request.

General Disclaimers: This material has been prepared by Brandywine Global Investment Management, LLC ("Brandywine Global") and is provided to certain qualified institutions, financial intermediaries, and institutional investors for informational purposes only. It may not be reproduced or redistributed without Brandywine Global's prior written approval. This material is not intended to be a forecast, research, or investment advice, and is not a recommendation, or an offer or solicitation to buy or sell any securities or to adopt any particular investment strategy. The information set forth herein has been derived from sources believed to be accurate, reliable, and current as of the date of this material, but is subject to change without notice. The opinions expressed may differ from those of other Brandywine Global portfolio management teams and our affiliates. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be, and should not be, interpreted as recommendations. The material was prepared without regard to specific objectives, financial situation or needs of any investor and should not be used as the basis of any investment decision.

Risk: All financial investments involve an element of risk. Past performance does not guarantee future results. The value of investments and the income derived from investments will fluctuate and a loss of principal can occur.

Foreign securities, foreign currencies, and securities issued by U.S. entities with substantial operations outside of the U.S. can involve additional risks relating to political, economic, or regulatory conditions in foreign countries. These risks include market/currency fluctuations, withholding or other taxes, trading, settlement, custodial, and other operational risks, and less stringent investor protection and disclosure standards in some foreign markets. All of these factors can make foreign investments, especially those in emerging markets, more volatile and potentially less liquid than U.S. investments. In addition, foreign markets may perform differently from the U.S. market.

Transactions in any option, future, commodity, or other derivative product is not suitable for all persons and accordingly, investors should be aware of the risks involved in trading in such instruments. Transactions in derivatives have the potential to increase liquidity risk and introduce other significant risk factors of a complex character. All securities trading, whether in stocks, options, or other investment vehicles, is speculative in nature and involves substantial risk of loss. No assurance, representation, or warranty is made by any person that any of the aims, assumptions, expectations, objectives, and/or goals stated herein will be achieved. Nothing contained in this material may be relied upon as a guarantee, promise, assurance, or representation as to the future.

Fixed income securities are subject to the risks associated with debt securities generally, including credit, liquidity and interest rate risk. High yield and lower-rated fixed income securities involve greater risk than investment-grade securities. Asset-backed, mortgage-backed or mortgage related securities are subject to additional risks such as prepayment and extension risks. High yield bonds possess greater price volatility, illiquidity, and possibility of default.

Equity investments are subject to market risk. The value of investment may fluctuate in response to the prospects of individual companies, particular sectors, and/or general market conditions. Investments in in speculative and/or small-cap, mid-cap and micro-cap companies may involve a higher degree of risk and volatility than investments in larger, more established companies, including such risks as lack of product diversification, potentially insufficient capital resources and greater exposure to business and economic cycles.

Portfolio Structure: Each client’s portfolio is individually managed and may vary from the information shown in terms of allocations, portfolio holdings, characteristics, and performance. Current and future portfolio compositions and performance may be significantly different. Any securities, sectors or allocations referenced may or may not be represented in portfolios of clients of Brandywine Global, and do not represent all of the securities purchased, sold, or recommended for client portfolios. The reader should not assume that any investments in securities, sectors and/or markets identified or described were or will be profitable or that similar investments will be available in the future.

Outlook: Economic and market forecasts presented herein reflect a series of assumptions and judgments as of the date of this material and are subject to change without notice. These forecasts do not take into account the specific investment objectives, restrictions, tax and financial situation or other needs of any specific client. Actual data will vary and may not be reflected herein. These forecasts are subject to high levels of uncertainty that can affect actual performance. Accordingly, these forecasts should be viewed as merely representative of a broad range of possible outcomes. These forecasts are estimated, based on assumptions, and are subject to significant revision and may change materially as economic and market conditions change. Certain information or statements contained herein may constitute a forward-looking statement. Forward- looking statements are predictive in nature and speak only as of the date they were made. Brandywine Global assumes no duty to and does not undertake to update forward-looking statements. Forward-looking statements refer to future events or conditions and are subject to a number of assumptions, risks and uncertainties that could cause actual results or events to differ materially from current expectations.

Third-Party Ratings: Any unpublished third-party rankings, awards or similar groupings have inherent limitations and qualifications, and are not indicative of the experience of any client or investor or of the future performance of any product described herein. There can be no assurance that the universe upon which the ratings or awards were based included all investment products within each category that are actually in operation or existence. The investment products on which the ratings were based may differ substantially in terms, objective, strategy, target risk return profile and certain other significant respects from those referenced herein.

Indices/Benchmarks: Indices are unmanaged and are not available for direct investment. Indices are not subject to fees and expenses typically associated with separate accounts or investments in funds. References to indices, benchmarks or other measures of relative market performance over a specified period of time are provided for your information only and do not imply that the portfolio will achieve similar results. The index composition may not reflect the manner in which a portfolio is constructed. While an adviser seeks to design a portfolio which reflects appropriate risk and return features, portfolio characteristics may deviate from those of the benchmark.

Selection of Representative Account: Representative accounts are generally the least restrictive account in a composite at the time of selection. Each client account is individually managed; individual holdings will vary for each account and there is no guarantee that a particular account will have the same characteristics as described. Actual results may vary for each client due to specific client guidelines, holdings, and other factors. In limited circumstances, the designated representative account may have changed over time, for reasons including, but not limited to, account termination, imposition of significant investment restrictions, or material asset size fluctuations.

Environmental, Social and Governance (“ESG”): This material discusses Brandywine Global’s current efforts to integrate responsible and sustainable investing principles into its investment process. Certain examples are provided herein for illustrative purposes only and are not intended to be representative of Brandywine Global’s investment process with respect to every investment. ESG investments may be viewed as “sustainable, “responsible”, or “socially conscious” among other names. Analysis and integration of ESG factors is qualitative and subjective by nature, and there is no guarantee that the ESG criteria used, or judgment exercised, by Brandywine Global will reflect the values of any one particular investor. Different investment managers may utilize and evaluate ESG factors in different ways. Investing in ESG investments carries the risk that under certain market conditions, the investment strategy may underperform strategies that do not utilize a responsible investment strategy. An investment’s ESG performance or Brandywine Global’s assessment of such performance may change over time. ESG is not a uniformly defined characteristic and information used to evaluate ESG characteristics may not be readily available, complete, or accurate, and may vary across providers and issuers. The ESG considerations assessed as part of the research and investment approval process may vary across eligible investments and not every ESG factor may be evaluated for every investment. There is no guarantee that the evaluation of ESG characteristics will be additive to a strategy or account’s performance.

This website and the information contained herein does not constitute and is not intended to constitute an offer of any kind, including securities and accordingly should not be construed as such. Any products or services referenced on this website are for informational purposes only and may not be licensed or permitted to be purchased in your jurisdiction, and unless otherwise indicated, no regulator or government authority has reviewed this website or the merits of the products and services referenced. The content of this website is intended for eligible institutional investors (as such term is defined in any given jurisdiction). Before acting on any information on this website you should be well informed of and observe all applicable laws, rules and regulations of your home jurisdiction and obtain independent advice if required.

Past performance is no guarantee of future results.