Undressing the STRIPS Market

STRIPS have historically provided significant diversification and helped with downside volatility in periods when equity returns were down the most. Explore the benefits of STRIPS and how active management can yield alpha opportunities.

End Notes
Sources: Jennison Associates LLC and “Bloomberg®” and Bloomberg Indices are service marks of Bloomberg Finance L.P. and its affiliates, including
Bloomberg Index Services Limited (“BISL”), the administrator of the indices (collectively, “Bloomberg”) and have been licensed for use for certain purposes by Jennison Associates LLC (“Jennison”). Bloomberg is not affiliated with Jennison, and Bloomberg does not approve, endorse, review, or recommend Jennison’s products. Bloomberg does not guarantee the timeliness, accurateness, or completeness of any data or information relating to Jennison’s products.

All data provided is as of 09/30/2025.

There is no guarantee our objectives will be met. All investments contain risk, including possible loss of principal. The strategy may vary significantly from the benchmark in several ways including, but not limited to, sector and issuer weightings, portfolio characteristics, and security types. Diversification does not protect an investor from market risk and does not ensure a profit or guarantee against a loss.

For informational purposes only and not for redistribution. This information is not intended as investment advice and is not a recommendation about
managing or investing assets. Jennison makes no representations regarding the suitability of any securities, financial instruments or strategies described herein. In providing this information, Jennison is not acting as your fiduciary. This information does not purport to provide any legal, tax or accounting advice.

The information contained in this document is directed only to qualified professionals and eligible institutional investors. Distribution of this information to any person other than the person to whom this presentation has been originally delivered, and to such person’s advisers, is not permitted. Any reproduction of these materials, in whole or in part, or the disclosure or redistribution of any of its contents, without the prior written consent of Jennison, is prohibited. These materials may contain confidential information and the recipient thereof agrees to maintain the confidentiality of such information.

Forecasts may not be achieved and are not a guarantee or reliable indicator of future results.

The views expressed herein are those of Jennison Associates LLC investment professionals at the time the comments were made and may not be reflective of their current opinions and are subject to change without notice.

Certain third party information in this document has been obtained from sources that Jennison believes to be reliable as of the date presented; however, Jennison cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. The information contained herein is current as of the date of issuance (or such earlier date as reference herein) and is subject to change without notice. Jennison has no obligation to update any or all such third party information; nor do we make any express or implied warranties or representations as to the completeness or accuracy of the third party information.

Jennison Associates is a registered investment advisor under the U.S. Investment Advisers Act of 1940, as amended, and a Prudential Financial, Inc. (“PFI”) company. Registration as a registered investment adviser does not imply a certain level of skill or training. Jennison Associates LLC has not been licensed or registered to provide investment services in any jurisdiction outside the United States. Additionally, vehicles may not be registered or available for investment in all jurisdictions. Prudential Financial, Inc. of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom.
Please visit https://www.jennison.com/important-disclosures for important information, including information on non-US jurisdictions
 

Market Definitions:
Coupon – the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate, which is the sum of coupons paid in a year divided by the face value of the bond in question.
Duration – a measure of the sensitivity of the price of a bond or other debt instrument to a change in interest rates.
Maturity – the date on which the life of a transaction or financial instrument ends, after which it must either be renewed or it will cease to exist. The term is most commonly used in relation to bonds but is also used for deposits, currencies, interest rate and commodity swaps, options, loans, and other transactions.
Option Adjusted Spread (OAS) – the measurement of the spread of a fixed-income security rate and the risk-free rate of return, which is then adjusted to take into account an embedded option.
Yield – a general term that relates to the return on the capital you invest in a bond.

Benchmark Definitions:
Bloomberg US Aggregate Bond Index includes securities that are US domestic, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. These major sectors are subdivided into more specific indices that are calculated and reported on a regular basis.
Bloomberg US STRIPS 10+ Year Index includes US Treasury Principal and Coupon STRIPS with a maturity of 10 years or more.
Bloomberg US STRIPS 15+ Year Index includes US Treasury Principal and Coupon STRIPS with a maturity of 15 years or more.
Bloomberg US STRIPS 20+ Year Index includes US Treasury Principal and Coupon STRIPS with a maturity of 20 years or more.
Bloomberg US STRIPS 25+ Year Index includes US Treasury Principal and Coupon STRIPS with a maturity of 25 years or more.
 

2025-4199529

This website is intended for Institutional and Professional Investors only. All investments involve risk, including the possible loss of capital.

Important Disclosures

Jennison Associates is a registered investment advisor under the U.S. Investment Advisers Act of 1940, as amended, and a Prudential Financial, Inc. (“PFI”) company. Registration as a registered investment adviser does not imply a certain level of skill or training.  Jennison Associates LLC has not been licensed or registered to provide investment services in any jurisdiction outside the United States. Additionally, vehicles may not be registered or available for investment in all jurisdictions. Prudential Financial, Inc. of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom.

Please visit https://www.jennison.com/important-disclosuresopens in a new window for important information, including information on non-US jurisdictions

This web site is not intended as an offer or solicitation with respect to the purchase or sale of any security or other financial instrument or any investment management services. It does not constitute investment advice, should not be used as the basis for any investment decision, and does not purport to provide any legal, tax or accounting advice. This is for informational and educational purposes only and should not be construed as investment advice or an offer or solicitation in respect of any products or services to any persons who are prohibited from receiving such information under the laws applicable to their place of citizenship, domicile or residence.

The views expressed herein are those of Jennison investment professionals at the time the comments were made and may not be reflective of their current opinions and are subject to change without notice and should not be considered investment advice.

Certain third party information in this material has been obtained from sources that Jennison believes to be reliable as of the date presented; however, Jennison cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. Jennison has no obligation to update any or all such third party information.

Your investment objectives, risk tolerance, and liquidity needs must be reviewed before suitable programs can be recommended. Asset allocation and diversification strategies do not assure a profit or protect against loss in declining markets. Investors should consult with their attorney, accountant, and/or tax professional for advice concerning their particular situation.

Please remember that there are inherent risks involved with investing in the markets, and your investments may be worth more or less than your initial investment upon redemption. There is no guarantee that the investment managers’ objectives will be achieved. Further, there is no assurance that any strategies, methods, sectors, or any investment programs herein were or will prove to be profitable, or that any investment recommendations or decisions we make in the future will be profitable for any investor or client. Professional money management is not suitable for all investors.

There is no guarantee our objectives will be met. All investments contain risk, including possible loss of principal. The strategy may vary significantly from the benchmark in several ways including, but not limited to, sector and issuer weightings, portfolio characteristics, and security types.

Information for persons in the United Kingdom and various European Economic Area jurisdictions  
In the United Kingdom, information is issued by PGIM Limited with registered office: Grand Buildings, 1-3 Strand, Trafalgar Square, London, WC2N 5HR. PGIM Limited is authorised and regulated by the Financial Conduct Authority (“FCA”) of the United Kingdom (Firm Reference Number 193418). In the European Economic Area (“EEA”), information may be issued by PGIM Netherlands B.V., PGIM Limited or PGIM Luxembourg S.A. depending on the jurisdiction. PGIM Netherlands B.V., with registered office at Eduard van Beinumstraat 6 1077CZ, Amsterdam, The Netherlands, is authorised by the Autoriteit Financiële Markten (“AFM”) in the Netherlands (Registration number 15003620) and operating on the basis of a European passport. In certain EEA countries, information is, where permitted, presented by PGIM Limited in reliance of provisions, exemptions or licenses available to PGIM Limited under temporary permission arrangements following the exit of the United Kingdom from the European Union. Jennison Associates LLC, PGIM Limited & PGIM Netherlands B.V. are wholly owned subsidiaries of PGIM, Inc. the principal investment management business of Prudential Financial, Inc. (‘PFI’).  PFI of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom. These materials are issued by PGIM Limited and/or PGIM Netherlands B.V. to persons who are professional clients as defined  under the rules of the FCA and/or to persons who are professional clients as defined in the relevant local implementation of Directive 2014/65/EU (MiFID II).

Links to third-party sites are intended for informational purposes only and should not be considered investment advice or recommendation to invest. These links do not constitute endorsement or confirm their accuracy, and we are not responsible for any third-party guidelines, security, or accuracy of information.