The Empirical Approach to Fixed Income

The Empirical Investment Committee regularly reviews our asset allocation models and each investment utilized in your portfolio (Figure 1 displays our Investment Research Cycle). Recently we completed a review of our fixed income investments and as result, we made some changes to the fixed income funds utilized in your portfolio.

A summary table of the asset classes utilized in our current fixed income strategy is shown in Figure 2. Two letters will be used to share our fixed income strategy and the underlying investment philosophy as it relates to fixed income. In this letter, we will discuss the role of fixed income in a portfolio, and the desired interaction between the fixed income/conservative components of your portfolio with the equity/growth portions of your portfolio. In next quarter’s letter, we will explain the risks inherent in fixed income investing and how the new fixed income portfolio is designed to help protect our clients from these risks.


Download (PDF)