Fixed Income

Controlled Risk

Managed Cash

The Managed Cash strategy offers an attractive alternative to traditional money market funds, CDs, Treasury Bills, Bankers Acceptances and Commercial Paper through the active management of higher yielding, investment grade and non-investment grade credits, which may include short corporates, asset-backed and mortgage-backed securities and U.S. Agency obligations. The strategy is appropriate for institutional investors with volatile and/or cyclical cash flows who seek more return from their liquid, short term investments without sacrificing overall portfolio credit quality while maintaining a comparable level of risk.  

Credit risk is minimized through the use of widely diversified positions.  Each portfolio is separately managed using investment grade and some high yield securities without the use of derivatives or leverage and in accordance with the investment policies and guidelines provided by the client. 


Short Controlled Risk

The Short Controlled Risk strategy is a risk averse strategy that invests primarily in investment grade short term debt securities and has a target duration of 1 to 3 years. It is intended for investors seeking an alternative to traditional money market funds, time deposits, or short-term investments while protecting principal.

This strategy has the potential to generate higher returns than traditional cash investments because of a relatively modest increase in duration in order to opportunistically benefit from higher market yields. Our actively managed approach takes advantage of many opportunities, particularly at the less efficient short end of the yield curve. 

This strategy can be used for a variety of purposes, such as institutional short term working capital, excess operating funds, insurance reserves, capital project funds and other accounts.

All portfolios are managed separately and in accordance with the investment policies and guidelines provided by the client.

Intermediate Controlled Risk

The Intermediate Controlled Risk strategy is a risk averse, moderate duration strategy that seeks to maximize current income and price appreciation through the use of government guaranteed, mortgage-backed, and investment grade corporate bonds when economic and market conditions are favorable. The philosophy is to consistently provide excess returns relative to the benchmark in a manner that is consistent with preservation of capital and prudent risk taking while maintaining an overall risk level similar to the benchmark. 

The strategy has a target duration that deviates only modestly from that of the intermediate indices. Since its inception it has generally offered interest rate risk in line with the U. S. bond market as a whole, as measured by the duration of both the Barclays Intermediate Government / Credit and the Barclays Intermediate Aggregate indices. The strategy utilizes multiple tactics in order to add value:

  • Yield Curve Management
  • Proprietary Credit Research
  • Maximization of Corporate Bond & MBS Spreads over Treasuries
  • Volatility Analysis
  • Duration Management

All portfolios are managed separately and in accordance with the investment policies and guidelines provided by the client. 

Core Aggregate Controlled Risk

The Core Aggregate Controlled Risk strategy is a risk averse strategy based on the philosophy that fixed income returns are primarily a function of income and interest on income. The foundation of the process involves an ongoing effort to maximize income within the respective credit and maturity guidelines of each client. This is accomplished by continuously assessing the relative value of the major sectors of the bond market. 

The firm employs a three-step, disciplined decision-making process to tactically position portfolios relative to the yield curve and to overweight selected market sectors such as corporate bonds, mortgage-backed securities and asset-backed notes. 

WCB’s approach calls for making many small divergences relative to the Barclays Aggregate Index in order to enhance performance.  First is yield enhancement through sector allocation, adding value by opportunistically overweighting corporates and/or mortgages relative to the Barclays Aggregate Index. Second is performance enhancement through security and credit analysis.  We look both quantitatively and qualitatively at credits and the yield curve.  Finally, we make performance enhancements through duration/maturity management.  We are able to manage risk through minor adjustments to the duration of the portfolio while adhering to the client’s specific security, sector and duration requirements.

All portfolios are managed separately and in accordance with the investment policies and guidelines provided by the client.

Core Government/Credit Controlled Risk

The Core Government/Credit Controlled Risk strategy is a risk averse strategy based on the philosophy that fixed income returns are primarily a function of income and interest on income.. The foundation of the process involves an ongoing effort to maximize income within the respective credit and maturity guidelines of each client. This is accomplished by continuously assessing the relative value of the major sectors of the bond market. 

The firm employs a three-step, disciplined decision-making process to tactically position portfolios relative to the yield curve and to overweight selected market sectors such as corporate bonds, mortgage-backed securities, asset-backed notes. 

WCB’s approach calls for making many small divergences relative to the Barclays Gov’t/Credit Index in order to enhance performance.  First is yield enhancement through sector allocation, adding value by opportunistically overweighting corporates relative to the Barclays Gov’t/Credit Index. Second is performance enhancement through security and credit analysis.  We look both quantitatively and qualitatively at credits and the yield curve.  Finally, we make performance enhancements through duration/maturity management.  We are able to manage risk through minor adjustments to the duration of the portfolio while adhering to the client’s specific security, sector and duration requirements.

All portfolios are managed separately and in accordance with the investment policies and guidelines provided by the client.


Core

Enhanced Cash

The Enhanced Cash strategy offers an attractive alternative to traditional money market funds, CDs, Treasury Bills, Bankers Acceptances and Commercial Paper through the active management of higher yielding corporate bonds, asset-backed and mortgage-backed securities, and U.S. Agency obligations. The strategy is appropriate for institutional investors with stable cash balances who seek more return from their liquid, short term investments without sacrificing overall portfolio credit quality while maintaining a comparable level of risk.  
 
Credit risk is minimized through the use of widely diversified positions.  Each portfolio is separately managed using investment grade securities without the use of derivatives or leverage and in accordance with the investment policies and guidelines provided by the client. 

 

Short Duration

The Short Duration strategy invests in investment grade short term debt securities and has a target duration of 1 to 5 years, easily customized to each client's mandate with separately managed portfolios. It is intended for investors seeking an alternative to traditional money market funds, time deposits, or short-term investments while protecting principal.
 
This strategy has the potential to generate higher returns than traditional short term investments through active management of put and call features, resulting in higher portfolio yields. Our actively managed approach takes advantage of other opportunities, particularly at the less efficient, short end of the yield curve. 
 
This strategy can be used for a variety of purposes, such as institutional short term working capital, excess operating funds, insurance reserves, capital project funds and other accounts.
 
All portfolios are managed separately and in accordance with the investment policies and guidelines provided by the client.

 

Intermediate

The Intermediate strategy is a moderate duration approach that seeks to maximize current income and price appreciation primarily through the use of both government guaranteed bonds and investment grade corporates. The objective of the strategy is to consistently provide excess returns relative to the benchmark in a manner that is consistent with the philosophy of preservation of capital and prudent risk taking while maintaining an overall risk level similar to the benchmark with moderate duration variances.

The strategy normally provides for a duration range that is typically modestly shorter than the intermediate indices.  Since inception, this strategy has generally offered superior risk / return characteristics compared to the U. S. bond market as measured by the Barclays Intermediate Government / Credit indices. The strategy utilizes multiple tactics in order to add value:

  • Yield Curve Management
  • Proprietary Credit Research
  • Maximization of Corporate Bond & MBS Spreads over Treasuries
  • Volatility Analysis
  • Duration Management

All portfolios are managed separately and in accordance with the investment policies and guidelines provided by the client.


High Yield

WCB offers customized high yield bond management for institutional and individual investors. Our approach to high yield bonds maximizes total return primarily through the active management of securities rated Ba1/BB+ and below. We seek to provide excess risk-adjusted return relative to the Merrill Lynch US High Yield Master II Index. Our high yield portfolios are managed to reflect our philosophy that in normal or “fair value” credit markets, high yield returns are primarily a function of income. However, at pronounced valuation extremes, capital appreciation or loss dominate income in determining total return. Hence, our high yield strategy involves a balanced effort to maximize income while minimizing capital loss potential (in low spread/yield environments) and maximizing capital appreciation potential (in high spread/yield environments). 

Our institutional high yield investment vehicles, listed below, can be tailored to meet individual clients’ duration targets and risk profiles. Given our focus on customization and meeting the individual needs of our clients, we are happy to work within guidelines ranging from short duration/maturity to ratings-constrained . 

Institutional Core Plus

  • An opportunistic bucket for high yield in investment grade portfolios
  • Strategic and tactical allocation decisions made top-down and bottom-up by WCB’s cross-asset-class team (investment grade, high yield, and equity)

Institutional Separate Accounts

  • Customized to fit client guidelines
  • Short duration and broad market strategies

The Parthenon Fund, LP

  • A diversified, short-duration, high yield bond commingled fund for accredited investors
  • Administered by Nottingham Investment Administration


Each portfolio is customized and managed separately and in accordance with the investment policies and guidelines as determined by the client.