The individual fixed income investments are in government backed bonds that consist of US Treasuries, US Agency bonds and Mortgage Backed securities along with high quality corporate bonds, preferred stocks, taxable municipal bonds and municipal bonds, where appropriate. Diversification is important in the bond portfolio, similar to the equity side.
All bonds have a credit rating of “A” or higher when purchased.
Our strategy is to build bond portfolios that take advantage of market volatility. A maturity ladder is typically structured to have a bond mature every year up through a maximum commitment of ten years. This has two benefits. First, we avoid the risk of having a major portion of the portfolio mature at a time when interest rates are low. Conversely, when interest rates are higher, there will be a steady flow of maturing assets to reinvest at those higher rates.
