Fixed Income Philosophy
We buy high quality bonds at attractive risk-spreads to create portfolios that take intelligent risks and demand proper compensation for risks undertaken.
I. We Buy Quality:
We purchase high quality investment grade securities that are backed by healthy assets and sustainable cash flows.
I. Relative Value Achieved:
We sell if the relative value of the investment has been fully captured and the price is no longer supported by fundamentals.
II. Price Paid Is Important:
We seek securities with an attractive total return profile. Bond prices and yields are evaluated relative to history and peers.
II. Thesis Changes:
We sell bonds if market dynamics introduce investment opportunities that improve the overall portfolio strategy.
III. Risk Conscious:
We invest in bonds with transparent and conventional security structures. All risks are analyzed carefully including credit, interest rate, liquidity, and sovereign risks.
III. New Risks Emerge:
We closely monitor risks and sell bonds if the credit profile of a bond begins to deteriorate or if other unacceptable risks emerge.