Broad Market Corporate Bonds

Strategy Overview

Account Minimum: $300,000 | Launch of Strategy: January 1, 2002

Long-term investors have enjoyed the benefits of diversifying their bond portfolios across all credit qualities within the U.S. corporate bond asset class. Blending a High Yield bond strategy with an Investment Grade strategy historically has lowered overall volatility and increased long-term returns. The portfolio management team targets an allocation of 67% Investment Grade and 33% High Yield to provide an investment solution that has an average credit rating of investment grade. The objective is to provide a diversified approach to the corporate bond market that can perform in various environments.

The targeted average credit rating objective is BAA. A bottom-up approach identifies investment opportunities that represent the most attractive value with strong prospects for consistent income and growth. The strategy offers extensive diversification with each portfolio containing at least 55 issues. To minimize risk, each high yield position represents approximately 1% of the overall portfolio. In addition, concentration limits within the high yield portion of the strategy are observed to assure appropriate industry diversification. A historical low portfolio turnover of approximately 30% per year.

Liquidity and safety are enhanced by investing only in bonds with an initial issue size generally in excess of $100,000,000. We access over 30 institutional broker/dealers seeking competitive bids and offerings. This trading network provides all of our clients with best pricing. A strict sell discipline is employed within the strategy.

Portfolio Statistics

(as of 9/30/2024)

wdt_ID	Name	Value
1	Average Maturity	6.10
2	Duration	4.80
3	Coupon	4.24%
4	Yield to Maturity	5.02%
5	Current Yield	4.41%
6	Target Diversification	55-60 Issues
7	Average Credit Rating	BAA2

Resources

Investment Grade

The strategy blends a fixed allocation of 67% Investment Grade and 33% High Yield in one portfolio with an overall credit rating objective of Baa, an average duration between five and six and an average maturity of seven to nine years.

Diversified Approach

The objective is to provide a diversified approach to the corporate bond market that can perform in various environments.

Bottom Up

A bottom-up approach identifies investment opportunities that represent the most attractive value with strong prospects for consistent income and growth.

Enhanced Liquidity & Safety

Liquidity and safety are enhanced by investing only in bonds with an initial issue size generally in excess of $100,000,000.

Diversified Portfolio

The portfolio is diversified across more than 55 issues and generally limited to a maximum of 15% per industry group.

Low Turnover

A historical low turnover of the portfolio, on average 30% per year.

Strategy Data

Calendar Returns

Annualized Returns

(period ended 9/30/2024)

Risk Statistics

(period ended 9/30/2024)

Annualized Returns

(period ended 9/30/2024)

wdt_ID	Period	CAM Gross	CAM Net of Fees	Weighted Bloomberg Index
1	YTD	5.73	5.52	6.21
2	1 Year	13.39	13.10	14.78
3	3 Years	0.10	-0.17	0.26
4	5 Years	2.08	1.81	2.37
5	10 Years	3.02	2.74	3.66
6	Inception	4.90	4.53	5.58

Risk Statistics

(period ended 9/30/2024)

wdt_ID	period	Standard Deviation CAM BM	Standard Deviation Weighted Bloomberg Index	Sharpe Ratio CAM BM	Sharpe Ratio Weighted Index
1	3 Yrs.	8.42	9.16	-0.45	-0.39
2	5 Yrs.	8.19	9.18	-0.04	0.00
3	10 Yrs.	6.54	7.24	0.21	0.28
4	Inception	5.95	6.91	0.55	0.57

Maturity Distribution

Industry Distribution

Credit Quality Distribution

wdt_ID	Type	Value
1	AAA	0.0
2	AA	4.3
3	A	43.7
4	BAA	20.0
5	BA	23.4
6	B	7.9
7	CAA	0.7
8	CA	0.0
9	< C	0.0
10	NR	0.0

*Bloomberg Index Ratings

Monthly Return Correlations (since 1984)

(as of 12/31/2023)

	High Yield	X-Over	U.S. Credit	S&P 500	EM*	Govt	U.S. Agg	Ba	B	Caa
Crossover	0.92
Credit	0.57	0.73
S&P 500	0.63	0.63	0.36
EM	0.63	0.63	0.56	0.55
Govt	0.22	0.35	0.84	0.14	0.31
Agg	0.34	0.49	0.91	0.21	0.40	0.96
Ba	0.94	0.98	0.68	0.62	0.62	0.19	0.31
B	0.99	0.88	0.54	0.62	0.62	0.19	0.31	0.91
Caa	0.90	0.77	0.38	0.56	0.54	0.04	0.14	0.78	0.88
Lev. Loans	0.77	0.73	0.37	0.48	0.44	-0.09	0.04	0.73	0.74	0.79

* EM since 1994

Source: Bloomberg Research and Indices