Our role in fixed income investing is to identify and select attractive bond investments with which to build our clients' fixed income portfolios while attempting to minimize overall risk and volatility.

We believe bond investors are lenders. So we pay attention to the factors that would influence a prudent lender's decision: credit (quality) risk, interest rate (duration) risk and structure (marketability and callability) risk on the loan. We use research from fixed-income data providers as well as our own examination to help us identify these factors.

Our primary strategy is to effectively overweight or underweight sectors of the various fixed-income alternatives available (treasuries, agencies, corporates or mortgages) which we determine to be most attractive. We do not take major positions predicated upon our perception of the direction of interest rates (which can substantially reduce returns if we are wrong), but at times we will seek to reduce interest rate risk by shortening the duration of a portfolio. We also recognize that transaction costs reduce bond portfolio returns, so we seek to minimize these.

Some risks that lead to higher potential bond yields are suitable for inclusion in a client's fixed income portfolio while others are not. We will rely on a client's risk tolerance guidelines and the purpose of the portfolio in making prudent investment decisions.