Bonds represent a complex asset class, often underappreciated and frequently misunderstood. We view fixed income securities as essential diversifying assets, and we believe that Anderson Hoagland’s competency in this area distinguishes us from other managers.

We believe that bonds should serve as a less volatile, diversifying component of overall client portfolios, so we have a bias toward high quality investment grade issues for both taxable and tax-exempt investors. 

We make ongoing assessments of the U.S. economy and the outlook for inflation in determining whether a bond’s length of maturity and level of quality will produce relative advantage for a client. The decision to increase portfolio risk by extending maturities or purchasing bonds less than AAA quality is a function of anticipating cyclical fluctuations in interest rates and credit spreads. 

We manage our portfolio maturities based on our expectations of future inflation and interest rate trends.  Portfolio holdings may rotate through different types of bonds in the course of an economic cycle.  We seek to limit risk by focusing on intermediate maturities.  The weighted average maturity of our bond portfolios normally falls between 5 and 15 years.

When considering a bond for purchase, our fundamental work focuses on the issuer’s financial strength and its ability to pay interest and return principal.  We often favor complex structures that offer incremental yield or additional investor protection, and we have analyzed a wide range of bond indentures and financial statements over the past 30 years. 

When we are satisfied that a bond meets our quality expectations, we negotiate pricing aggressively and use competitive bids and offers to obtain advantageous trade execution on behalf of our clients. 

Our long term return objective is to produce real returns (returns above the rate of inflation) of 2% to 3% in non-taxable accounts (retirement plans, endowments, etc.) and 1% to 2% net of tax in tax-exposed accounts.

back to top