FIXED INCOME MANAGEMENT

We believe that fixed income securities play an important and varied role in achieving our clients’ investment objectives. Whether an individual investor, corporation, pension fund, non-profit organization, or self-insurance trust, our fixed income management strategies are customized to satisfy the most fundamental investment needs:

• Asset and sector diversification of investment portfolios
• Predictable steady cash flow and income
• Liquidity of invested principal
• Effective risk/reward management

We emphasize the above attributes in all of our client portfolios regardless of whether their objective is balanced growth as a complement to our equity management style or exclusively fixed income oriented.

Investment Strategy

We offer a select variety of investment strategies:

• Taxable intermediate total rate of return
• Taxable enhanced current income
• Tax-advantaged total rate of return
• Tax-advantaged current income
• Taxable self-insurance trusts in accordance with stated investment policy

Regardless of whether Taxable or Tax-advantaged, we invest exclusively in higher quality bonds (Baa/BBB to Aaa/AAA). For tax-advantaged accounts we invest primarily in insured bonds with underlying credit quality of A or better. We maximize after tax returns by purchasing in-state municipal bonds not subject to the AMT (Alternative Minimum Tax) as appropriate. For taxable accounts we invest in Corporate bonds, Government Agency bonds, U.S. Treasury Notes/Bills, Taxable Municipal securities, and Mortgage-backed securities (if suitable). We diversify our Corporate bond obligations across various sectors and will over/under weight according to our valuation of each sector’s current and expected risk/reward profile.

Interest rate risk management and liquidity are also important considerations in executing our investment strategy. We are very focused on ensuring that there is an active secondary market for the securities that we purchase for our clients. Liquidity is not only important for providing cash when needed, but also to easily effect change of investment strategy when necessary. Since changes in interest rates are the biggest contributors to the market value of fixed income securities, we place a great deal of emphasis on economic analysis. We use a discipline that encompasses the more traditional economic indicators with our own proprietary macro-economic model so that we might better anticipate cyclical changes in interest rates. This enhances our ability to reposition the duration of our client portfolios to maximize returns.