Fixed Income
Our approach to fixed income investments is designed to reduce volatility by minimizing interest rate risk as well as credit risk. We examine a broad range of investment-quality securities issued by credit worthy entities with appropriate tax, maturity, and yield characteristics. Next we review their historical yield relationships versus appropriate benchmarks and peer groups. Finally, we assess the issuer’s future prospects before making our selections. We add value by focusing on relatively undervalued sectors and issuers that meet our quality requirements.
What your portfolio will look like:
- Well Diversified: Our portfolios will be well diversified on the basis of maturity and, in the case of corporate bonds, issuers.
- Investment Grade: All of our fixed income investments will be in investment grade securities (BBB or better).
- Sector Management: We monitor interest rates spreads between sectors and will emphasize sectors providing the best return relative to risk.
- Duration Management: We will manage a portfolio’s duration (the weighted average maturity of cash flows) based on our outlook for future interest rates.
- Income Generation: Assuming that income generation is the primary objective for fixed income investments, we manage portfolios to provide a high and steady income stream rather than for total return.
- Long Term: Most of our fixed income investments will be long term, often until the maturity of the instrument.
