2ND QUARTER FIXED INCOME

Fixed Income Market: Our aversion to long-term bonds remains and is reinforced by the inflationary situation. We like bond maturities under two years which now have higher rate returns than previous years. We like laddered investments with a mix of U.S. Government, municipal, and high- quality corporate bonds. We also like the new better-paying opportunities in money market funds.   The bond market has been on something of a round trip in 2023. The yield on the 10-year U.S. Treasury note – which moves inversely to prices – rose to 3.861% on June 30. It was 3.481% on March 31 and 3.826% at the end of 2022. Investors usually flock to U.S. Treasuries when they want safety. Some of the worries that drove prices higher in the first quarter seem to have abated in the second quarter.

Other Assets:  We continue to explore alternatives to public markets and believe that Private Credit and Private Equity positions could provide similar return opportunities with less volatility. Private credit, which includes direct lending, mezzanine debt, and distressed debt investments, offers the potential for attractive risk-adjusted returns while exhibiting a lower correlation to traditional public markets. We have been utilizing Broadly Syndicated Loan vehicles and Collateralized Loan Obligations structured as BDCs which can provide investors with greater security through collateral, yields, and a hedge against inflation through floating rate structures.