Past performance is no guarantee of future results. This presentation is for informational purposes only and reflects the opinions of Western Asset Management’s Chief Risk Officer as of November 4, 2010. Information contained herein is believed to be accurate, but cannot be guaranteed or relied upon as a factual prediction or forecast. Opinions represented are not intended as an offer or solicitation with respect to the purchase or sale of any security and are subject to change without notice. Statements in this material should not be considered investment advice. All investments involve risk, including possible loss of principal amount invested. There is no guarantee that the investment objectives will be met. Employees and/or clients of Western Asset Management may have a position in the securities mentioned. This publication has been prepared without taking into account your objectives, financial situation or needs. Before acting on this information, you should consider its appropriateness having regard to your objectives, financial situation or needs. It is your responsibility to be aware of and observe the applicable laws and regulations of your country of residence.
Western Asset Management Company Distribuidora de Títulos e Valores Limitada is authorized and regulated by Comissão de Valores Mobiliários and Banco Central do Brasil. Western Asset Management Company Pty Ltd ABN 41 117 767 923 is the holder of the Australian Financial Services Licence 303160. Western Asset Management Company Pte. Ltd. Co. Reg. No. 200007692R is a holder of a Capital Markets Services Licence for fund management and regulated by the Monetary Authority of Singapore. Western Asset Management Company Ltd is a registered financial instruments dealer whose business is investment advisory or agency business, investment management, and Type II Financial Instruments Dealing business with the registration number KLFB (FID) No. 427, and a member of JSIAA (membership number 011-01319). Western Asset Management Company Limited (“WAMCL”) is authorised and regulated by the Financial Services Authority ("FSA"). In the UK this communication is a financial promotion solely intended for professional clients as defined in the FSA Handbook and has been approved by WAMCL.
This material may not be reproduced or used in any form or medium without express written permission. © Western Asset Management Company 2011.
October 2010
The credit crisis that began in 2007 reinforced some fundamental principles of risk management that we believe investors should be aware of. Despite all the changes to the investment landscape since the crisis erupted, three principles, in particular, once again proved accurate: prediction is very difficult, investing is not a game, and clarity is imperative.
Risk Management Team
The Risk Management Department is responsible for providing analytical and risk management support to the investment team. It is comprised of five specialized groups:
- The Risk Analysis group, which performs original analysis of risks in portfolios;
- The Risk Management and Modeling group, comprised of the most senior people in risk management with subject-matter expertise in mortgage-backed securities, structured products, foreign exchange, emerging markets, sovereign risk, credit risk and rate risk;
- The Risk Reporting and Data Integrity group, which handles data management and maintenance for all securities that Western Asset holds or follows, as well as benchmarks and all risk-reporting and related functions;
- The Enterprise Risk group, which is responsible for coordinating firm-wide practices for identifying, monitoring and mitigating the various risks to which the firm is exposed, and
- The Risk Systems and International group, which is involved in the building of Western Asset's internal risk systems and which conducts regional meetings and analyses of risk.