Janet Rilling leads the plus fixed-income division at Allspring Global Investments.
Photo courtesy: Allspring Global Investments
Janet Rilling’s journey to becoming a prominent figure in finance began with her first investment as a teenager. Originally from Wisconsin, she now serves as a senior portfolio manager and heads the plus fixed-income team at Allspring Global Investments, recognized as one of the leading female fund managers by Morningstar.
Her enthusiasm for finance was ignited by her father, who engaged in personal investing and fostered discussions about it during family dinners. At just 16, Rilling opened her first certificate of deposit, and while in college, she invested in her first mutual fund through an individual retirement account.
With three decades of experience in fixed income, Rilling holds a master’s degree in finance from the University of Wisconsin along with CPA and CFA credentials. Based at Allspring’s Milwaukee office, she stands out not only for her impressive career, noted by Morningstar, but also because of the ongoing gender disparity in the field; a recent Morningstar survey revealed that women represent only 18% of portfolio managers and 26% of analysts.
“I find this industry incredibly rewarding, and I believe women can contribute significantly and gain a lot from it,” Rilling expressed. “It’s surprising that the representation of women in this industry has seen little progress during my career.”
Implementing Her Investment Strategy
Currently, Rilling identifies numerous opportunities in fixed income due to attractive yields. “The beauty of that income is that it acts as a cushion. Even if rates increase, you have income to help offset that,” she explained. This outlook provides her with confidence to adopt a positive stance on fixed income in the current environment.
As the leader of the plus fixed-income team, Rilling oversees a group of 23 investment professionals. Additionally, she manages the Allspring Core Plus Bond fund, which has earned a four-star rating from Morningstar. The fund boasts a 30-day SEC yield of 4.29% and a gross expense ratio of 0.81%, placing it in the top quartile for its category over the past 5, 10, and 15 years, though its current performance ranks in the third quartile.
Team Dynamics and Investment Focus
Rilling’s team employs a systematic approach that blends qualitative insights with quantitative analyses, according to Morningstar senior analyst Mike Mulach. The fund emphasizes high-quality income, with a collaborative process where each team member contributes their unique perspectives, focusing primarily on the investment-grade portion of the portfolio.
The core holdings comprise at least 65% of the portfolio, allocated within the Bloomberg US Aggregate Bond Index, including Treasurys, agency mortgage-backed securities, investment-grade corporate bonds, and structured products.
Up to 35% of the fund is dedicated to “plus” investments, which include U.S. high yield, emerging market debt, and European credit. “We aim for a wide-ranging allocation within the plus segment, as we believe it leads to greater diversification and a more stable return profile,” Rilling noted. Currently, the “plus” allocations account for approximately 12% of the fund, as Rilling indicates valuations appear high. “While no single sector stands out as exceptionally cheap, we believe the additional yield across them justifies our allocations,” she added, with current distributions of 3.3% in U.S. high-yield bonds, 2.3% in emerging markets, 2% in European investment-grade credit, and 2.6% in European high-yield securities.
Identifying Promising Areas
Currently, Rilling is particularly interested in various structured products, including agency mortgage-backed securities. “When assessing valuations over the last cycle, they are more reasonably priced compared to investment-grade credits, which are at their highest levels historically,” she observed. “We’re optimistic about supply and demand dynamics that should further support this asset class through 2025.”
She also favors asset-backed securities, focusing on standard exposures like credit-card and auto loans, as well as more unconventional “esoteric” holdings. “These include investments in data centers and loans to franchisees, representing a mix of consumer and business-oriented exposures. We appreciate the strong fundamentals in this market segment,” Rilling stated. “We find the compensation aligns well with potential risks.”
The fund maintains a modest allocation to commercial mortgage-backed securities. Although this area may face scrutiny due to challenges in the office market, Rilling sees opportunity in sectors such as retail and hospitality. “We’ve been strategic in identifying undervalued securities amidst broader market concerns,” Rilling concluded. “These selections provide better value relative to other parts of the fixed-income landscape.”
