AGGRESSIVE FIXED INCOME
Investor Profile
An investor in this strategy desires a high level of current income and is willing to invest in bonds with greater than average credit risk to achieve the desired income. This investor is willing to accept potential fixed income losses that may occur due to the credit risk of the portfolio.
Strategy Objective
The aggressive fixed income strategy is positioned to achieve a high level of current income while still maintaining a diversified portfolio of fixed income funds. The target distribution rate is over five percent. The benchmark for the strategy is 40% Bloomberg Barclays US Corporate High Yield Total Return Index Unhedged, 20% Bloomberg Barclays Emerging Markets USD Agg Total Return Index Unhedged, 20% S&P/LSTA Leveraged Loan Index, 20% Bloomberg Barclays US Agg Total Return Unhedged.
Strategy Characteristics
In order to achieve a high level of current income but still provide diversification, this strategy will utilize several different fund styles. The strategy is flexible and can incorporate any funds that can help achieve a diversified portfolio of high income investments. It is likely the strategy will include high yield corporate funds, bank loan funds, funds that focuses on asset backed/mortgage back securities, total return funds, international debt funds and other funds as deemed fit. The strategy may also from time to time invest in publicly traded debt investors such as Business Development Companies.
The strategy will focus on credit risk and it is expected that only modest interest rate risk will be taken. However, the strategy has the flexibility to invest in long duration bonds if deemed appropriate.
The strategy will focus on credit risk and it is expected that only modest interest rate risk will be taken. However, the strategy has the flexibility to invest in long duration bonds if deemed appropriate.
Strategy Process
Fund managers are screened to select managers with significant expertise in the area of focus. In addition to screening for high quality fund managers, an emphasis is placed on diversification so no one particular type of credit risk is able to create very significant losses for the strategy. There are many different ways to invest in credit and this strategy will attempt to maintain proper diversification between the various alternatives. However, tactical asset allocation will be utilized. Certain credit risks can and will be given an over or underweight in the strategy. Tactical asset allocation decisions will be made based on internal research and research provided by third parties. Performance of managers within the fund and those we hold in high regard will be monitored and manager changes will be made if deemed appropriate.
*The investment(s) discussed may not be suitable for all investors. Investors should make investment decisions based on their own specific investment objectives and financial circumstances.
**Additional information is available upon request.
***Any investment contains risk, including the risk of total loss, fluctuating prices and uncertain returns.
**Additional information is available upon request.
***Any investment contains risk, including the risk of total loss, fluctuating prices and uncertain returns.