High Yield SMA

Launch of strategy: April 1, 1989   |   Account minimum: $100,000*

The portfolio management team employs a value approach whereby we purchase only U.S. dollar denominated corporate bonds and seek those that we feel are undervalued. A bottom-up approach identifies investment opportunities that represent the most attractive value with strong prospects for consistent income and growth. Preservation of capital is considered essential to the objective of the portfolio, which is total return over a full market/economic cycle.

We look to minimize the overall volatility of the portfolio by focusing on the upper tier of the High Yield credit curve targeting BB & B rated securities, as well as the more senior liabilities of a firm’s capital structure (Senior-Subordinate Debentures) and CCC rated securities are not eligible for purchase. A primary emphasis on established companies and industries leads us to avoid sectors that have precarious operating profiles.

The portfolio is diversified across more than 35 issues. Concentration limits are observed to assure appropriate industry diversification and reduce risk. A historical low portfolio turnover of approximately 45% 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.