Broad Market SMA

Launch of strategy: January 1, 2002   |   Account minimum: $300,000

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 BBB. 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 helps to reduce transaction costs.

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.