FIXED INCOME STRATEGY

Strategy Overview

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. 

Investment Approach

  • 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

  • Maintain core fixed income market exposure through the use of broad-based bond funds

  • 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

  • May invest in ETFs, closed-end funds, and mutual funds to attain desired investment allocation

  • May invest in individual fixed income securities to attain specific targeted investment exposure

  • Typically utilize both actively-managed and passive investments to achieve desired exposure to specific segments of the fixed income markets

  • Investment holding periods may include both short-term and long-term, based on the portfolio management team’s view of global markets

  • May invest in foreign markets, including both emerging and developed credit markets

 

Risk Management

  • Flexible investment allocation, based on views of the portfolio management team

  • Diversification across multiple segments of the global fixed income markets

  • 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

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.

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