Columbia Partners’ Fixed Income portfolios seek to provide consistent total returns and stability by focusing on high quality securities.
Our goal is to provide investors with superior performance while controlling risk. We believe the highest returns are achieved through effective sector allocation, active management of portfolio duration and maturity distribution in anticipation of changes in interest rates, and individual security selection to capture relative value.
Greatest Risk-Adjusted Relative Returns
We allocate assets to various sectors of the bond market (primarily Treasuries, agencies, corporates, mortgage-backed and asset-backed securities) seeking to provide the greatest risk-adjusted relative returns. Sectors are evaluated as to their current yield advantage over comparable Treasury securities. These levels are then compared to historical yield ranges and the likely performance of the sector in the anticipated interest rate environment. The relative attractiveness of each sector will determine its weighting in the portfolio.
Portfolio duration and yield curve distribution will deviate from that of a client’s stated benchmark when our evaluation of economic fundamentals and market technical conditions suggest an impending change in interest rates. The extent of this deviation is based on our confidence in our outlook. Factors considered in the duration decision include our outlook for economic growth, inflation expectations, and anticipated Federal Reserve actions.
We purchase and sell individual securities to meet our broader strategy decisions and to capture relative value opportunities. Characteristics which are analyzed include a bond’s yield advantage over comparable duration Treasuries, the historical range of yield spreads for comparable securities, the credit quality and liquidity of an issue, and the option characteristics (calls, puts or sinking funds), if any. We explicitly seek to maintain high quality ratings in our portfolio, and believe that ceding a modest amount of yield will result in lower volatility.
We provide a number of different strategies for our clients, ranging from short-term cash alternatives to longer duration portfolios.