ULTRA-SHORT FIXED INCOME STRATEGY
Short-duration fixed income portfolios customized to the unique needs of institutions and individuals
The Blue Current Ultra-Short Fixed Income Strategy specializes in managing short-duration fixed income portfolios customized to the unique needs of institutions and individuals. The investment considerations surrounding these capital pools call for tailored solutions. Working closely with our clients we construct policies and portfolios to match each client’s distinct needs and circumstances.
All of our portfolios emphasize three guiding principles with respect to its investment philosophy:
- Preservation of principal
- Maintenance of adequate levels of liquidity
- Providing a competitive rate of return for clients
The objectives for each client vary and therefore, our portfolio construction process is adapted to meet the unique circumstances of each client's portfolio. Each portfolio is customized to the unique circumstances, risk tolerance, time horizon and other variables for each client. We believe a separately managed account provides greater control to clients while avoiding the commingled risks of money market and fixed income mutual funds.
All portfolios employ a time-tested, multi-faceted investment approach based on the four cornerstones of fixed income investing — duration management, yield curve positioning, sector allocation, and security selection. The Blue Current team believes this multi-faceted approach, which combines top-down management with bottom-up security selection, affords clients the best possible diversification and portfolio return potential in a variety of economic environments.
In duration management, we work to control the overall interest rate risk for each portfolio both on an absolute basis or if appropriate relative to the portfolio benchmark. Yield curve positioning is utilized to optimize maturities across the yield curve. Yield curve positioning can be driven by client cash flow needs or market opportunities to increase yield or reduce risk. Sector selection is primarily used as a diversification tool. While not all sectors contribute the same yield to the portfolio, it is important to remain diversified.
Security selection is a key component in the risk/return aspects of each portfolio. Our security selection process incorporates both historical fundamental credit research as well as forward looking analysis. Blue Current’s security selection process begins with fundamental credit analysis. Utilizing historical reported financials, we evaluate the balance sheet, income statement, cash flow, profitability, credit quality & capital structure (in the case of banks), growth, and coverage ratios for specific issuers within an industry. The first objective of credit analysis within the security selection process is to identify issuers who have the ability to cover interest and principal payments. Through the credit analysis process, Blue Current compares relative value of issuers within an industry group as well.
The final component of the security selection process is evaluating risks in the future and a changing market landscape. We have developed an Early Warnings Indicator system to assist with evaluating changing market dynamics and event risk. All four tenants of the fixed income process are actively engaged simultaneously to construct portfolios that are skewed to achieve each client's objectives.
Understanding Your Cash Needs
We understand the unique needs related to cash and tailor our services accordingly. Our service includes:
- Assistance in developing and maintaining the investment policy statement
- Management of the assets in accordance with the IPS including asset allocation in a separately managed account including a segregated account at an institutional custodian
- Selection and monitoring of investments
- Reconciliation of the assets with the custodian
- Monthly reports of holdings and transactions
- Quarterly investment reviews containing investment performance
- Attendance at meetings to discuss investment management and returns
- Assistance with reporting required for audit/tax filing and collaboration with all your service providers (attorneys, accountants, investment advisors, etc.)