Investment Products: Fixed Income
Our approach to managing fixed income portfolios is based on two fundamental beliefs. All decisions and strategies are based on the Preservation of Capital, and that the opportunities and risk in the bond markets requires an Active Management approach.
Preservation of Capital: In an effort to protect our clients’ capital, we focus our research and the resulting portfolio on high quality issuers. The assessment of quality is both an objective analysis based on credit ratings (both internal and external) and subjective judgment based on our outlook of the company and industry. In addition to our emphasis on high quality, we approach the research process with a conservative mindset. This conservatism has meant that we have not relied on the credit rating agencies. While we review their opinions, we believe that it is important to complete first hand research of the security covenants, company fundamentals, and industry forces that might affect the holdings in our portfolio.
Active Management: We believe that an active approach to bond management can add significant value to portfolio results, while helping to reduce risks in the portfolio. Our philosophy towards active management is based on three principles: an approach that considers both capital gains and income in decision making, gradualism and the incremental capturing of gains, and due consideration regarding historical norms for yield spread relationships.
