Investment Management

The Dimensions of Fixed Income Returns

Philosophy | Markets | Traditional | Portfolio | Stock Returns | Fixed Income

The primary role of fixed income is diversification to dampen portfolio volatility. While low-grade obligations and long-term bonds have higher expected returns than high-grade obligations and short-term bonds, Strategic Capital believes that the corresponding premiums are not large enough to reward the additional risk.

By keeping maturities short and credit quality high, Strategic Capital minimizes portfolio risk from fixed income so that investors can focus on the much-higher equity market return factors. Within our fixed income maturity and credit range, Strategic Capital strives to maximize returns and outperform conventional benchmarks.

Performance Advantage

The mutual funds that we utilize have added returns over comparable indexes for more than twenty years. Academic studies have documented these results. Our returns come from structure and execution.

Focused and Flexible

Strategic Capital's strategies are designed to capture stronger exposure to the factors that drive returns. Our portfolios are broadly diversified to eliminate excess risk.

Principles and Beliefs

• Markets Are Efficient
  Markets work and, for investment purposes, assets are fairly priced.
• Risk and Return Are Related
  Priced risk factors determine expected return.
• Diversification Is Key
  Diversification is the antidote to uncertainty. Concentrated investments add risk with no additional expected return.
• Structure Explains Performance
  Asset allocation principally determines results in a broadly diversified portfolio.

Investment products offered by Strategic Capital Trust Company are: