FIXED INCOME

Our fixed income process is an active total return methodology which seeks to provide attractive returns while controlling risk over economic and interest rate cycles. Investment decisions are based upon an analysis of historical relationships which are used to quantify risk and potential return.

The level of inflation-adjusted long-term yields, compared to historical yield levels, provides perspective on the current attractiveness of longer maturity assets. This perspective is enhanced by an analysis of the shape and level of the short-term yield curve, which is directly determined by the Federal Reserve, and is, in fact, a proxy for Fed policy.

A full range of investment-grade securities may be used, with yield advantage to Treasuries being the primary determinant of portfolio weighting for corporate and mortgage securities.

In every case, maturities are diversified across the yield curve, with the final structure leaning in the direction indicated by Fed policy. Portfolios are further diversified with respect to the appropriate asset classes, and risk is addressed through the use of high quality securities that have adequate liquidity.