Our firm distinguishes itself from other asset managers by offering a solution to the problem of harvesting a meaningful income from bonds without taking unreasonable credit or interest rate risk.
We believe a portfolio where the return is determined by contract, rather than expectation and hope, should be part of many investors’ overall asset allocation.
We Buy Smaller Positions Than Most Institutional Managers Find Practical
At the core of our investment approach is a decision to buy smaller positions than larger fixed income managers find practical, trading income for liquidity. Sellers of the bonds we buy are often retail investors selling bonds in small dollar amounts known as “odd lots.” Odd lots have fewer potential buyers than do larger “round lots,” and to attract buyers, odd lots usually sell at lower prices, and with higher yields.
We Seek Higher Yields Than Mutual Funds with Similar Duration and Credit Quality
By buying odd lots and holding the bonds to maturity or call, Income Focus expects its clients’ portfolios will have higher yields and similar credit quality to investment alternatives offered by mutual funds with similar durations.
We Trade Income for Liquidity
Our portfolio characteristics may come at the cost of decreased liquidity. Unlike a mutual fund, which can be sold any market day at its net asset value, a portfolio holding many small positions of individual bonds can expect to be sold at a discount if liquidated early.
We Hold to Maturity or Earlier Call
To avoid the same price penalty experienced by the seller, we intend that bonds purchased by Income Focus will be held to maturity or earlier call. We do not attempt to anticipate the direction of interest rates. Instead, we seek to enhance wealth and current income with disciplined security selection, achieving stable and consistent returns.
We Research Each Bond
We research each bond using a common sense approach to the underlying credit. Our decisions often mirror those of a bank considering whether or not to grant a mortgage loan. Do the borrower’s assets exceed its debt? What is the likelihood that the revenue to meet the bond’s obligations will continue to grow? Are there favorable economic trends that will make cash flows more secure?
We Hold Client Assets in Separate Accounts
Client assets are held in separate accounts, in the client’s name, at Charles Schwab & Co. or Fidelity Investments, and are never co-mingled.