Our fixed-income investment strategy seeks to maximize your current after-tax income while minimizing risk. Our Investment Strategy Committee examines overarching factors affecting interest rates such as the current economic landscape, government spending, Federal Reserve policy, and the general direction of interest rates. We then drill down on fixed income-specific metrics to select bonds for your portfolio.
- Yield spread – This is the difference between the interest rate paid on government bonds versus corporate debt. We take advantage of periodic spikes and compressions in spreads to enhance returns in your portfolio.
- Yield curve – This is a linear graph that plots the return on the y axis and the maturities on the x-axis. Based on our general point of view for the direction of rates, we identify the range of maturities for bonds for your portfolio that offer the optimal yield.
- Duration – This measures how much bond prices will change as interest rates move, and is important in controlling your portfolio risk. When rates are rising, we select bonds with shorter maturities; when rates are declining, longer maturities (with their higher rates) tend to be more attractive.
- Credit quality – This determines the likelihood that a bond issuer will meet its interest payments and repay debt, and is a vital component in managing your portfolio risk.