Absolute Income Celebrates One Year

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Tradition Capital Management’s absolute income fund expected yield of 6.8% is higher than the expected yield of 2.5% of the Bloomberg Barclay’s U.S. aggregate.

Tradition Capital Management celebrates the one year anniversary of its investment strategy, Absolute Income. Absolute Income was developed to fill the income requirement desired by many clients. This is seen as a replacement for the low yields currently available in bonds. In its first year, Absolute Income delivered a 8.98% return for the year ending June 30, 2017, while the Barclay’s U.S. Aggregate Bond Index returned -0.31% over the same time period.

“With interest rates at historical lows, traditional bonds, both municipals and taxables, are not providing the yields necessary to generate income for clients. We created the Absolute Income Fund to fill this need,” states Benjamin C. Halliburton, Chief Executive Officer of Tradition Capital Management. “The typical investor portfolio is comprised mostly of stocks and bonds. There are other asset classes – non-correlated ones – that can be introduced into a portfolio to increase diversification while keeping their risk exposure near the same level. Absolute Income uses these low-correlated asset classes to lower volatility in a client’s portfolio while providing a higher expected yield and the results we’ve seen this first year demonstrates their effectiveness.”

Positioned as a bond substitute, the Absolute Income Fund has the potential to increase a client’s income stream compared to a traditional bond portfolio while providing some protection in a down market. The Absolute Income Fund uses diversifying assets, including reinsurance, alternative lending, variance risk premium harvesting, and real estate to increase the potential expected return while diversification lowers, but does not eliminate, a client’s exposure to risk. While the Barclays Aggregate Bond Index has an expected yield of 2.5%, Tradition’s Absolute Income Strategy is modeling an expected yield of 6.8%. Tradition believes it has created a fund to increase expected yield not just in the short run, but as long as interest rates remain unusually low.

About Tradition Capital Management, LLC:

Tradition Capital Management, LLC is an SEC Registered Investment Adviser (RIA) under the Investment Advisers Act of 1940 providing portfolio management and related services for a fee. Founded in 2000, Tradition manages over $500,000,000 in assets and has over 250 years combined investing experience on its Investment Committee. For more information or to view our full disclosures and ADV, please visit http://www.TraditionAdvisers.com.

Absolute Income strategy was conceived in December 2015 with client funding in the strategy beginning in June 2016. Past performance is not indicative of future results. Investing involves risk and may result in losses. At a given time, any risk asset class or asset may lose value and result in substantial losses. Inflation risk is an additional risk for financial assets. Tradition Capital Management does not make any assertions, estimates or guarantees about future results. Expected returns, expected yield, and expected risks are not forecasted returns or risks, but are only statistical definitions for modeling purposes.

Tradition Capital Management, LLC claims compliance with the Global Investment Performance Standards (GIPS®). Tradition Capital Management, LLC has been independently verified for the periods October 17, 2000, through December 31, 2015. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards through December 31, 2015. Verification does not ensure the accuracy of any specific composite presentation. A copy of the verification report(s) is/are available upon request. See full firm disclosures http://www.TraditionAdvisers.com.

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Heather Mazzoucolo

Benjamin Halliburton
since: 06/2015
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