1ST QUARTER FIXED INCOME

Fixed Income Market: The U.S.  bond market was more troubled and anxious than the stock market. It suffered its worst quarter in more than 40 years and deprived investors of its traditional safe haven. The yield on the benchmark 10-year U.S. Treasury Note (which moves inversely to prices) settled at 2.324% up from 1.496% at the end of December. The Bloomberg U.S Aggregate bond index – a mix of Government and highly rated corporate bonds – returned minus 6%, its biggest quarterly loss since 1980. 

Other Assets: Our aversion to long-term bonds remains and is reinforced by this interest rate outlook. We like bond maturities under two years and cash.

We also are looking at alternative investments through Broadly Syndicated Loan vehicles and Collateralized Loan Obligations which can provide investors with greater security through collateral, yields, and a hedge against inflation through floating rate structures.