A managed account program seeking low risk income from corporate, government and municipal bonds

 

The fixed income program tailors its investment in corporate, municipal and treasury securities to meet the individual requirements of each client. We drive performance through security selection, taking into account interest rate risk, credit risk, tax specific risk and income requirements. Average maturities will vary by client with portfolio duration typically three to five years, but not more than seven years.

All BPAM investment programs are implemented through a managed account program tailored to each client's needs. All securities are held by Fidelity Investments.

Investment Objective The Cornerstone Fixed Income program is a managed account program specifically tailored to each individual's requirements. The investment objective of the program is to minimize capital risk and maximize after tax income. Four factors are considered when constructing a client's portfolio: interest rate risk, credit risk, taxes, and current income requirements. Interest Rate Risk: Generally we will seek to create a laddered portfolio that maintains a three to five year duration but not to exceed seven years. This is normally sufficient to increase portfolio yield with any further increase in term providing only a marginal increase in yield. Credit Risk: We generally prefer to own securities rated A- or better. Based on our research, lower rated credits begin to take on equity like risk characteristics (although they may still be termed "investment grade"), muddling the purpose of a fixed income portfolio in asset allocation. We believe fixed income provides the steady anchor to a portfolio that allows the remainder of the portfolio to take additional risk for higher returns. Taxes: We will examine your tax position (federal, state, local, AMT) and will appropriately tailor a portfolio of corporate, treasury and tax free municipal bonds. When selecting bonds, we are focused on the underlying credit rating of the issuer rather than relying on the enhancement of credit insurers. Current Income: We must balance your income requirements with the need to minimize taxes, and interest rate and credit risk. For certain clients, that may mean locking in longer term municipal or corporate bond yields to stabilize cash flow during exceptional market periods.

For additional information please review our Product Brochure