Company risk, event risk, country risk, interest-rate fluctuations, and US dollar and commodity swings all can have an adverse impact on one's total asset allocation overnight. Our active fixed income strategies are designed to give our clients more 'ballast in the boat' when markets become turbulent. We customize each portfolio to match our clients' goals and expectations with quality fixed income. High-quality fixed income gives our clients liquidity, stable income and principal protection. Essentially, we construct a 'sleep-well-at-night' portfolio tailored to each client's needs. These actively managed accounts are designed either as stand-alone portfolios or as overlays to an existing equity portfolio managed at SAC. For further information, please read our Disclosure Statements.

Core Government

OBJECTIVES

  • Seeks to provide a stable income stream, principal protection, and to out-perform market-weighted inflation on a risk-adjusted total return basis vs. the relevant benchmark
  • Designed for clients whose policies limit them to US Government securities
  • Separately managed to a client's specific cash-flow needs, combined with an allowance to take moderate credit and maturity risk for yield enhancement purposes
  • Provides high degree of liquidity with an asset allocation heavily weighted in high quality fixed income securities

INVESTMENT PHILOSOPHY

  • Utilizes a disciplined Investment Selection Committee comprised of senior portfolio managers and research analysts
  • Asset allocation is driven by a two-tier approach: a 'top-down' view of global markets followed by SAC's qualitative and quantitative 'bottom-up' approach
  • Top-down duration is actively managed following current interest rate trends along with the client's objectives to pinpoint those sectors and maturities that provide the best investment opportunities
  • Bottom-up individual security selection is utilized by senior portfolio managers based on relative value, credit-worthiness, and potential price and income appreciation of a particular sector and index in the context of our top-down view
  • Portfolios are then adjusted accordingly within the constraints of individual client's requirements

INVESTMENT PROCESS

  • The strategy first reviews Federal Reserve monetary policy, which is used to predict inflation 12 to 24 months in advance
  • By adding analysis on the US Treasury Inflation-Protected 2-Year Note yield into the equation, SAC has been able to find a high correlation between inflation and parallels in interest-rate moves
  • Proprietary research is utilized to determine the diversification across sectors and industries as well as credit quality and yield curve positioning
  • We customize and separately manage each portfolio so we can meet a client's individual goals, risk tolerance, and liquidity and tax requirements
  • Portfolio duration is maintained within a +/-15% band around the corresponding benchmark to minimize market volatility within a client's portfolio