In selecting issues for bond portfolios, CSG takes the same
approach it uses in selecting common stocks in that it focuses
on very high quality, investment grade or fully insured bonds.
CSG seeks to maximize returns without subjecting portfolios to
extremes in interest rate and credit risk. Client bond
portfolios may consist of taxable, and/or tax-free issues,
depending on individual tax rates. Short and intermediate
maturities are emphasized with a maximum effective maturity
of ten years. The securities are typically a part of a balanced
account of stocks and bonds.
Bond Funds/High-Yield Bonds
Our bond managers employ three taxable bond strategies, Fixed,
High-Yield, and Diversified. The High Yield portfolio is naturally
more aggressive than a portfolio diversified across all quality
levels and is designed to provide the client with a higher
current yield and total return. A bottom-up value-type investment
style is employed, with a focus on the balance sheet of the
business. In evaluating high-yield corporate and convertible bonds,
our managers look closely at company management, business plans,
and prospects for the future. They look for securities trading at
a discount to their underlying value, and subject them to a variety
of creditworthiness tests before adding them to the portfolios.
Corporate securities must also pass a fundamental balance sheet test:
the discounted value of the company's assets must exceed the total
liabilities senior to and including the reviewed bond.
Diversified Fixed Income
The Diversified Fixed Income portfolio is also an actively
managed portfolio of individual bonds. Up to fifty percent of the
portfolio is invested in high-yield and convertible bonds, and at
least fifty percent is restricted to investment-grade securities.
The portfolio is designed for clients who want both a strong
current yield and capital growth with dampened volatility.
Fees & Expenses
Annual fees range from .75% to 2.5% based on types of
fixed income securities and total assets under management.
Although allocating assets over multiple managers and strategy is
intended to diversify risk, there is no assurance such goals and objectives can be accomplished.