Recent conversations with investors have revealed that many RIAs, family offices, and institutional investors are looking for “something different” in fixed income. It makes sense to us given that the primary benchmark in fixed income is currently offering a less than compelling risk return profile. If the benchmark is giving less yield with more risk, then it makes sense that investors would want their fixed income strategies to look different than the index. (Another small win for active vs passive investing.)
My response to some of their questions has been reflective of the tactical nature of the portfolios here at Bramshill.
"Just because you are long only, doesn't mean you are always long."
Here are some current stats1 on Bramshill’s Strategic Income Portfolio that embody our tactical approach.
- 60% of the book is in shorter term floating rates (versus longer term fixed coupon)
- Portfolio is short duration with a duration of approximately 1 year
- The yield on the portfolio is over 5%
As we mentioned in previous blogs and commentaries, the team at Bramshill sees much higher interest rates and a steeper yield curve as we look out. This positioning served us well during the month of September as we returned +1.77% vs. the Barclays U.S. Aggregate Bond Index return of -0.48%. While investors re-evaluate their fixed income allocation, we encourage you to consider your exposures versus the benchmark and seek compelling yield with an eye on risk.
Stephen Selver is the CEO at Bramshill Investments, an asset management firm specializing in absolute return solutions within fixed income and income producing assets. Click here to view his bio and other team members of Bramshill Investments.
This commentary is provided by Bramshill Investments, LLC for informational purposes only and may contain information that is not suitable for all investors. Certain views and opinions expressed herein are forward-looking and may not come to pass. Investing involves risk, including the potential loss of principal. Past performance may not be indicative of future results, which are subject to various market and economic factors. No statement is to be construed as an offer to sell or a solicitation of an offer to buy securities, or the rendering of personalized investment advice.