Thanks to our firm's size and experience, we have a security selection advantage. We can invest in a way that big firms cannot. Increasingly rare among fixed income offerings, we construct "all cash" portfolios and do not need derivatives to take risk. In a bond market preoccupied with primary issuance, we closely follow the secondary market for individual security ideas. We consider variables such as callability, deal size, and market conditions when we think about each position. As “buy and hold” investors, we have a liquidity advantage which, for example, means we can evaluate and invest in smaller deal, non-index bond issues when they offer enough reward. Finally, we care about trade execution. We evaluate the price of every bond transaction on an individual basis and are not willing to accept a blended price for a list of trades.
We are careful about risk. We diversify carefully, we consider liquidity, and we pay close attention to our clients' investment policy guidelines. We have developed internal portfolio systems that allow us to evaluate the various fixed income risk variables (interest rate risk, yield curve risk, credit risk, and structure risk) during portfolio construction. Additionally, our systems perform an ongoing check at the individual security level which allows us to deliver not only risk management, but the attention to detail that our clients expect.