Bonds Selection Process

  • Compliments equity component to lower portfolio risk
  • Ranges: Intermediate maturities (2 – 8 years)
Portfolio Structure
  • Laddered based on best risk / reward characteristics
Sector Selection
  • Add value by allocating between U.S. Treasuries, agencies, municipal, & corporate bonds based upon best total return opportunities
Risk Control
  • Interest rate risk

    1. Avoid long bonds
    2. Ladder maturities to take advantage of different interest rate periods for reinvestment
    3. Use higher coupon bonds
Credit Risk
  • Strict credit criteria – equity approach
Event Risk
  • Diversify among U.S. Treasuries, agencies and investment grade municipal and corporate bonds. No more than 5% of portfolio held in any one issuer.