Our Core fixed income portfolios seek to provide consistent returns and the stability afforded by focusing on high quality securities. We believe in achieving the highest returns from a portfolio of fixed income securities through:
- Sector allocations
- Active management of the portfolio’s average duration and maturity distribution in anticipation of changes in interest rates
- Individual security selection to capture relative value
Our process is consistent with an absolute commitment to a conservative approach. We avoid excessive risk and do not reach for extra yield. A well-diversified and high-quality portfolio has allowed us to add incremental value in normal market environments and perform exceedingly well in more difficult times.
Our fixed income portfolio approach:
- We modify portfolio duration to protect principal or capture gains.
- We adjust maturities with expected changes in the shape of the yield curve.
- Sector weights are based on their relative risk/reward profile.
- Portfolios are invested in investment grade securities.
- We constantly review the credit outlook for portfolio holdings.
We allocate assets to various sectors of the bond market—primarily governments, mortgages, corporate, and asset-backed securities—to provide the greatest risk-adjusted relative returns. Our core fixed income portfolios hold between 100 and 120 securities.