FIXED INCOME STRATEGY
Strategy Overview
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The Abbot Fixed Income Strategy is a global fund-based investment strategy designed to provide preservation of capital, investment income and a lower risk and volatility profile than most equity market strategies. The strategy is implemented based on a top-down, global macroeconomic investment approach, used to target specific areas of the fixed income markets. The portfolio management team takes a tactical view of the macroeconomic outlook, fiscal and monetary policy, and investor sentiment – along with the outlook for interest rates, credit spreads, credit availability, and the yield curve. The strategy typically maintains exposure to a range of fixed income market segments, which may include government-backed and corporate securities, investment grade and high yield securities, fixed-rate and floating-rate securities, and/or shorter or longer duration investments. The strategy may invest in exchange traded funds (ETFs), closed-end funds, and mutual funds across fixed income markets, and in some circumstances individual fixed income securities. The strategy may also include exposure to developed and/or emerging foreign markets, to achieve the portfolio management team’s desired investment allocation.
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Investment Approach
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Utilize a top-down approach and global macroeconomics to define the strategy’s targeted investment allocation, based on the portfolio management team’s view of global markets
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Maintain core fixed income market exposure through the use of broad-based bond funds
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Target specific areas of the fixed income markets to capitalize on the portfolio management team’s view of global markets, interest rate trends, credit spreads, and risk environment
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May invest in ETFs, closed-end funds, and mutual funds to attain desired investment allocation
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May invest in individual fixed income securities to attain specific targeted investment exposure
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Typically utilize both actively-managed and passive investments to achieve desired exposure to specific segments of the fixed income markets
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Investment holding periods may include both short-term and long-term, based on the portfolio management team’s view of global markets
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May invest in foreign markets, including both emerging and developed credit markets
Risk Management
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Flexible investment allocation, based on views of the portfolio management team
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Diversification across multiple segments of the global fixed income markets
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Manage portfolio’s duration and credit exposure based on the portfolio management team’s view of global markets and the business and economic cycle
Portfolio Management
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The Abbot Fixed Income Strategy is managed by the Abbot Portfolio Management Team, using a team approach to manage and make shifts in the strategy’s investment allocation. Abbot Financial has been managing private client investment accounts for more than 35 years.