When it comes to fixed-income securities, our philosophy is a simple one—no surprises. Fixed-income portfolios are assembled to provide:
U.S. Treasuries and U.S. Agencies usually make up the majority of holdings in our fixed-income portfolios. We typically ladder these securities, keeping the longest maturity within 12 years. When corporate bonds are purchased, we emphasize quality and diversification. And, when a bond reaches maturity the proceeds are reinvested according to the client’s needs.
The interest rate environment at a given time is the primary determinant of fixed-income performance. We pay close attention to potential bond-rating changes to mitigate overall portfolio risk. Our main research effort focuses on macro economic forces and their effects on the economy. So when we select fixed-income investments, we focus on current domestic and foreign economic conditions, future outlooks, monetary policies, inflation and trade balances.