Fixed Income Strategies

Traditional buy and hold strategies involving individual bonds or indexed mutual funds present little, if anything, to get excited about. We realize that many advisors and institutions approach fixed-income investing from the “keep it simple” point of view – and, above all else, “do no harm”. We look at the fixed-income markets in very much the same way. However, we also believe that our clients should not simply “punt” on fixed-income performance, but rather make attempts to add marginal performance, where possible, while maintaining reasonable risk profiles as measured by duration, credit quality, and standard deviation. We approach the fixed income market holistically, seeking to seize upon opportunities in all sectors of the marketplace. We focus on sectors of the market that may have inefficiencies, where an informed investor may profit over the course of market and interest rate cycles. Our focus in always on adding alpha to client portfolios, or risk adjusted out-performance. We believe our decade-long track record of success in these markets may have us uniquely positioned to add alpha to your clients’ fixed-income portfolios, while preserving the “keep it simple”, “safe money” aspect of fixed-income.

The foundation of our fixed income strategy centers on the exchange traded fund market and these fixed income securities that trade on the New York Stock Exchange. These mutual funds have similar characteristics to traditional open-end mutual funds, with the exception that these securities trade on an exchange rather than at net asset value. This creates a premium/discount framework where funds can trade below their intrinsic value due to the supply and demand of the specific fund and the sector that it covers. This may present a tremendous opportunity as these discounts fluctuate over time. We focus on securities trading at historically wide discounts, thereby limiting future discount widening and the potential downside risk for the security. Over time, with a diversified basket of these securities, the potential for discount narrowing presents an opportunity for out-performance over traditional fixed income investment strategies.

By utilizing a combination of individual bonds, ETFs, and other securities, combined with our overlay of duration and credit management, we believe we have a recipe that may continue to be alpha-additive over time. We look forward to showing you more details!