Intermediate Government/Corporate

Our concentration on intermediate bonds is grounded in historic returns. Over time, portfolios of intermediate maturity bonds have captured a high percentage of the returns achieved by longer bond portfolios, while experiencing considerably less risk and price volatility. ("Intermediate" generally indicates 1-10 year maturities, while "long" bonds typically range from 10-30 year maturities.)

Positioning the Portfolio

Using our proprietary indicators, we actively manage the portfolio duration to take advantage of key opportunities. When our indicators are positive, overall portfolio maturity/duration is lengthened to capture higher current yields and potential capital gains. These same indicators serve to warn us of threats to the markets and rising interest rates, allowing us to shorten portfolio maturity/duration to limit potential declines.

We seek the most desirable mix of government bonds, government agency securities and investment grade corporate bonds. Positioning these securities at desired points along the yield curve completes the strategy. Over the years, corporate securities have played an important role in our fixed income management approach. In fact, a review of the past 25 years shows corporate securities outperforming treasuries in two out of three years. Our portfolios are typically benchmarked against the Barclay's Intermediate Government/Credit Bond Index.

Intermediate Fixed Income Overview