During June, the Bramshill Income Performance Strategy generated positive monthly performance of +0.21% as fixed income markets stabilized and investor sentiment improved despite continued uncertainty surrounding monetary policy and economic growth.
We continued to emphasize high-quality income opportunities, liquidity, and prudent risk management while maintaining our preference for rate exposure over lower-quality credit at historically tight spreads. Investment grade corporates remained the Strategy's largest allocation at approximately 50%. Within investment grade corporates, we selectively added to ETR, KKR, and CG baby bonds. This was offset by sales in MU long dated paper which had rallied significantly and was trading at less than 70bps spread over matched duration treasuries. These changes reflect our continued focus on relative value and profit-taking where valuations no longer adequately compensate for risk. Our BDC bullpen is warming up. We have recently bought two of the best quality names on our list (BCRED, GSCRED) and we continue to target Senior 5yr debt with strong balance sheets and asset coverage ratios. Preferred securities remained stable at approximately 12% of the Strategy. Following the redemption of a BK preferred position, proceeds were reinvested into an attractive MS preferred security, allowing us to maintain attractive income while preserving overall portfolio quality. High yield corporate exposure was unchanged at approximately 8% of the Strategy, with a modest addition to a senior loan closed-end fund to enhance income while maintaining a conservative overall allocation. We continue to favor selective, lower-beta credit exposure rather than broadly increasing spread risk given current valuations. Our long-duration U.S. Treasury exposure remained stable at 20%, continuing to provide duration, diversification, and portfolio ballast. Municipal exposure also remained unchanged at approximately 1%, with modest repositioning between existing closed-end fund holdings as we sought incremental relative value opportunities. Cash and short-term Treasury balances increased from approximately 8% to 10% of the Strategy, reflecting selective profit-taking and a desire to preserve flexibility as market valuations become more challenging. Looking ahead, we remain constructive on high-quality fixed income and continue to believe an actively managed approach is well positioned for the current environment. We remain focused on identifying attractive relative value opportunities across these sectors while emphasizing downside protection, liquidity, and risk management as economic growth moderates and policy uncertainty persists.
This commentary is provided by Bramshill Investments, LLC for information 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. Stated performance is reflective of realized/unrealized capital gains/losses and investment income achieve in composite accounts, net of investment management fees and expenses for trading, custody and fund maintenance (where applicable). Returns reflect the reinvestment of dividends and other such distributions and performance for January 2009 through April 2012 depicts actual returns generated by the strategy while managed by the Firm’s Chief Investment Officer at an unaffiliated investment firm. All information is accurate as of the date of publication and is subject to change without notice.
