Strategy & Tactics

Our Investment Strategy adds value by producing superior returns and cash flows

  • Incremental yield – the creation of an enduring yield advantage versus the benchmark
  • Sector judgments and specific security selection / avoidance
  • Maintaining a duration near benchmark
  • Diversification across yield curve and among holdings
  • Enhanced cash flow providing superior reinvestment opportunity over the long term

Sector Selection: Overweight corporate bonds and mortgages

Mortgage and corporate bonds have outperformed treasuries in 22 of the past 29 years

Table includes annual returns for corporate mortgage and U.S. Treasury Sectors of the Bloomberg Barclay’s U. S. Aggregate Bond Index. Source: Bloomberg Barclay’s Aggregate.

Investment Process: Top Down Theme Identification

  • Our process is centered around macro theme identification which involves studying the global landscape for trends that will impact investment decisions.
  • Discussion of supply and demand fundamentals
  • Consideration of relative attractiveness of spreads among sectors
  • We are not beholden to benchmark sector weightings
  • With diverse backgrounds and experiences, each portfolio manager brings a different perspective of the investment world to the table.
  • Years of observations and macro environment study has been central to our long term success and sets Orleans Capital apart from its competition.

Investment Process: Bottom Up Security Selection

  • The portfolio management team uses an equity-like approach in evaluating securities for buy list and sell candidates
  • Potential buy names are researched and analyzed using several methods
    • Street research, third party independent research, internal research discussed collectively
  • No emphasis on rating agencies in determining value
  • Early sellers of “red-flag” credit names, avoidance of credit risk is crucial

Fixed Income & Economic Macro

  • Macroeconomic Inputs
  • Capital Expenditures
  • Economic Growth
  • Monetary Policies
  • Sector Fundamentals
Identify the best sectors given our macro views
Select best-in-class bonds for chosen investment themes
  • Company Financial Models
  • Stock Price Movements
  • Relative Value Modeling
  • Spread Movement

Security Selection: Equity Like Approach