We manage clients’ fixed-income portfolios with the same fundamental, intrinsic value investment philosophy used to manage our equity portfolios. Fixed income securities are evaluated on a total return basis, considering income and capital appreciation potential. They may be used as a portion of multi-asset, risk managed portfolios or as a standalone separate account.
The corporate bond selection process begins by screening the investible universe of U.S. investment grade bonds with a market cap above $3 billion. The results are sorted by option adjusted spread within each economic sector. The team then considers the credit quality (default risk), yield, duration and liquidity of the individual securities.
The result of the screening and selection process is a portfolio of approximately 20 equally weighted bonds. The portfolio is constrained by sector within a range that mimics the broad investment grade bond universe. The portfolio is monitored against the pool of investible fixed income instruments on a regular basis. If an existing holding reaches what we deem to be fair value or if credit concerns arise, the position may be replaced. A position may also be replaced if there is a better portfolio opportunity.