Strategies and Performance

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Strategies & Performance
Top Corporate Bond Holdings by Sector

Consumer Discretionary:

Archer Daniels Midland Co., Lear Corp., Mead Johnson Nutrition Co., Staples Inc., Tech Data Corp.

Energy:

ConocoPhillips, Enterprise Products, FMC Technologies Inc.

Financials:

Barclays Bank, Brookfield Financial, Duke Realty, JP Morgan Chase & Co.

Healthcare:

AbbVie Inc., Dignity Health

Insurance:

Aon, Assured Guaranty, Chubb Corp.

Materials:

MeadWestvaco Corp.

Utility:

Public Service Co. of Oklahoma

fixed_high_quality

Our focus in selecting fixed income securities is primarily based on credit quality and cash flow, while also providing yield generation. We believe that fixed income provides a strong foundation to a balanced portfolio; therefore we reduce risk by investing in companies with low default risk. Taxable bond portfolios are constructed using US Treasuries, US Agency or investment grade corporate bonds. We currently favor Agencies and corporate bonds due to the low returns offered by US Treasuries. Tax free bond portfolios are constructed using high quality municipal bonds from the state in which the client resides.  Recent optimism regarding corporate and individual tax reform has raised interest rates. If tax reform goes through, the expectation that economic growth would accelerate could push rates to the top of the range we have had the last year. Reform would likely allow the Federal Reserve to continue to tighten monetary policy; also a negative for bonds. This uncertainty favors WWM’s strategy of using individual bonds. Interest rates rise and fall, however, high quality bonds mature at par. Our preference remains for high quality bonds with average duration of 5 years and shorter or structured bonds that have coupons that will float or step up as rates rise.

This investment strategy is not a recommendation to buy or sell any of the securities mentioned.  Past performance is not a guarantee of future results.