- Not affected by activity of other investors (bond funds frequently buy and sell bonds, and rarely hold them to maturity, so they are affected by current market conditions).
- Offer a finite maturity date on which the investor gets his or her principal back (there is no date on which an investor can expect a bond fund to return 100% of principal).
- Offer lower costs and potentially higher yield than bond funds.
- Provide fixed income payments.
- Provide the flexibility to customize the portfolio to address specific tax considerations and credit risk concerns.
- May create more stability in the portfolio since we have better control over the price at which individual bonds are purchased and sold versus bond fund shares.
Active Bond Management
CLS’s active bond management approach allows us to take advantage of bond market inefficiencies by adjusting portfolio allocations when opportunities arise and market conditions change. Additionally, bond duration management provides liquidity by allowing us to target specific maturity dates. It may help preserve portfolio principal by aiding with risk management. We rely on quantitative and fundamental research to guide us in adjusting portfolio allocations when opportunities arise to maximize yield.