BOND
Investor Profile
An investor in the Bond Strategy desires a modest level of current income and safety of principal. This investor is willing to accept some risk of either short term principal losses or principal impairment in order to achieve a higher level of current income than what would be available to an investor taking minimal credit or interest rate risk.
Strategy Objective
This benchmark for the strategy is 70% Bloomberg Barclays US Agg Total Return Unhedged, 10% Bloomberg Barclays Emerging Markets USD Agg Total Return Index Unhedged, 10% S&P/LSTA Leveraged Loan Index, 10% Bloomberg Barclays Global Agg Total Return Index Unhedged. The target distribution is over three percent.
Strategy Characteristics
The Bond Strategy will include several total return bond funds, two or three high yield bond/bank loan funds, several international bond funds and any other fund that may add value. Although some individual funds may take significant credit risk or interest rate risk, the strategy as a whole will be positioned to take modest credit risk or interest rate risk. However, the strategy is flexible and from time to time the interest rate risk or credit risk may be increased. If duration is extended, this strategy should provide some capital appreciation in a declining interest rate environment.
Strategy Process
A lot of emphasis is put on fund manager screening. Fund managers in this strategy need to have an adept understanding of global economies and a proven ability to invest appropriately. Alpha in strategy will come more from economic analysis than security analysis and we are looking for managers that are particularly focused on understanding global economic data. The managers selected will be able to make tactical asset allocation decisions as deemed fit but we are not investing in managers that are making very concentrated investments. We will from time to time make tactical asset allocation decision between managers. Performance of managers is monitored and we will make manager changes if we believe it is appropriate.
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*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.