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Fixed Income Investment Process
An Active Fixed Income Strategy
NCM Capital's fixed income process implements strategic duration
and yield curve positions reflecting the firm's macroeconomic
and interest rate outlook. Active sector selection takes advantage
of relative spread opportunities. Individual security selection
is based on credit quality and relative value. Securities may
be sold when a credit deteriorates, spreads narrow or a more attractive
opportunity emerges in the same sector.
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CLIMATE ASSESSMENT
Develop macro forecasts and 6-12 month
interest rate outlook
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OPPORTUNITIES
Implement duration and yield-curve positioning
strategies
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SECTOR ALLOCATION
Determine sector weightings based on
industry analysis, spread trends and duration weighting
vs. index
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SECURITY SELECTION
Select individual issues based on fundamental
credit and relative value analyses
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PORTFOLIO CONSTRUCTION
Apply risk controls: security and portfolio
quality standards and allocation limits for lower-rated
bonds
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PORTFOLIO MONITORING
Implement sell discipline: better opportunity
in sector, profit-taking, credit deterioration, narrowing
of spreads vs. historical averages
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