Fixed Income Strategy

The Fixed Income Strategy utilizes Exchange Traded Funds (ETFs) with underlying investments in fixed-income securities to create each portfolio. The primary objective of these portfolios is to seek a competitive current level of income, with a secondary objective of price appreciation. Portfolio duration and sector allocation are actively managed to maximize the potential for total return.

Fixed income ETFs are used in this strategy because they compliment a macro-economic, top-down approach to investing. Since ETFs are traditionally designed to allow for one investment instrument represent an entire index or sector, exposure to the broad fixed-income market can be obtained with just a few ETF positions. ETFs also allow for portfolio duration and sector allocation to be rebalanced without liquidity risk or excessive trading costs.

The Fixed Income Strategy is a research driven, diversified portfolio using Laffer Tengler’s proprietary data, known as the Economic Chartbook. The Economic Chartbook is a compilation of numerous macroeconomic variables, which are analyzed to forecast the fixed-income market’s reaction to current and future market conditions. The Economic Chartbook is the result of decades of experience in top-down, supply-side research and analysis, and is published on a monthly basis.

Three key area of macro-economic research are used by the investment team to construct the optimal fixed-income portfolio:

  1. Economic Growth Indicators
  2. Federal Reserve Monetary Policy
  3. Inflation Barometers

Strategy Leaders: Arthur B. Laffer, Jr. & Jason P. Weaver, CFA®
Strategy Team Member: Jonathan Berkowitz

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