Bailard’s fixed income strategies seek to provide stable and predictable income streams while focusing on capital preservation and being tax aware for taxable accounts. Our process starts with a top-down analysis of market drivers, such as interest rate cycles and sector trends and valuations, and pays careful attention to structural stresses as a risk-mitigation measure. We apply a conservative approach that focuses on liquid issuers with investment grade bond ratings and use exchange-traded funds (ETFs) to invest residual cash and achieve duration and diversification targets.
We deliver strategies for both taxable and tax-exempt accounts, including for individuals, families, and foundations. For clients striving to balance their environmental and social values with their financial objectives, we incorporate our Sustainable, Responsible and Impact Investing philosophy into the portfolio process.
Taxable Account Strategies
Total After-tax Return
Actively managed after-tax return portfolios that seek to provide accounts with an attractive level of income while focusing on capital preservation and being tax-aware.
Construct intermediate duration (level of interest rate risk) portfolios by investing in securities generally maturing between 1 and 18 years. Accounts are managed using The Bloomberg 1-15 Year Municipal Index1 as a reference. Tax consequences are considered in trading decisions. This generally results in lower trading activity when interest rates fall and higher activity when rates rise. Emphasis is placed on liquid bond issuers and monitoring credits to ensure they fit our quality criteria.
Municipal Ladder
Relatively passive bond portfolios that seek to provide accounts with an attractive level of income while focusing on capital preservation and being tax-aware.
Construct 1-152 year bond portfolios with maturities spread relatively evenly across the years. By staggering maturity dates, investors benefit from dollar-cost averaging or reinvesting systematically over time. When bonds mature, proceeds are reinvested into longer maturities at existing levels of interest rates. We focus on liquid bond issuers and monitor credits to ensure they fit our quality criteria.
Tax-exempt Account Strategies
Aggregate Bond
Actively managed total return bond portfolios that seek to provide accounts with an attractive level of income while focusing on capital preservation.
Accounts are managed relative to The Bloomberg Aggregate Bond Index. This index consists of U.S. dollar-denominated fixed-rate taxable bonds diversified among sectors including Treasuries, government related, corporate, and securitized products. We focus on liquid bond issuers and monitor credits to ensure they fit our quality criteria.
Intermediate Government Credit
Actively managed total return bond portfolios that seek to provide accounts with an attractive level of income while focusing on capital preservation.
Accounts are managed against The Bloomberg Intermediate Government Credit Index. This index includes U.S. dollar-denominated fixed rated government-related and investment grade U.S. corporate securities that have a remaining maturity of greater than one year and less than ten years. Many foundations choose this relatively conservative fixed income strategy. We focus on liquid bond issuers and monitor credits to ensure they fit our quality criteria.
Corporate Ladder
Relatively passive bond portfolios that seek to provide accounts with an attractive level of income while focusing on capital preservation.
Construct 1-103 year bond portfolios with maturities spread relatively evenly across the years. By staggering maturity dates, investors benefit from dollar cost averaging or reinvesting systemically over time. When bonds mature, proceeds are reinvested into longer maturities at existing levels of interest rates. Investment-grade corporate bonds and taxable municipal bonds are used for this strategy due to their yield advantage over Treasury and agencies. We focus on liquid bond issuers and monitor credits to ensure they fit our quality criteria.
Portfolio Manager
“The intricacies of the bond market have long been a source of fascination for me. I love learning about each client’s needs and tailoring a portfolio suited for them to help build an income stream and preserve their capital.”
—Linda Beck, CFA, Senior Vice President and Director, Fixed Income
Featured Topics
Nuclear Energy Issue Brief
As climate change threatens the natural world and the viability of the capital markets, the tone around nuclear energy has started to change. It has even garnered bipartisan and Wall Street support, shifting investors’ attention towards this sector.
So, does nuclear energy provide a low-emissions solution to rapidly rising energy demands? Or does it distract investors from the stronger opportunities in renewables?
Corporate Engagement Update Q3 2024
Bailard’s approach to corporate engagement focuses on both the shareholder process and supporting other stakeholders working to improve disclosures on important environmental, social, and governance (ESG) issues.
Financed Emission Issue Brief
A brief diving into the importance of analyzing and collecting emissions data from investments.
Get in Touch
If you have questions or would like more information about Bailard’s long-only fixed income strategies, we invite you to reach out to us.
1 Using the Bloomberg 1-15 Year Municipal Index as representative of the market.
2 Can construct portfolios to 18 years.
3 At time of purchase, bonds through 11 years to maturity are considered part of the 1-10 year bond ladder.
Investing in bonds is subject to risk, including market, interest rate, issuer, inflation, credit, and liquidity risk. Liquidity risk and price validity will be heightened when market makers hold less inventory and are less willing to transact. Investments in fixed income can lose value due to sudden or unexpected changes in interest rates. The value of fixed income investments is inversely proportional to interest rates, meaning they will lose value in a rising interest rate environment. Longer duration bonds tend to be more volatile than lower duration bonds. If an issuer defaults, investors could lose both interest and principal. Bond investments may be worth less or more than original cost when sold.
There is no assurance that Bailard can achieve its investment objectives. Investors in ETFs will incur fund management fees and expenses that are in addition to the management fees paid to Bailard. Bailard does not provide tax advice.