The investment objective for the Sumner Fixed Income Fund is to achieve long –term Total Return while creating current income. The average duration of the fund will be between 28 years. The fund can invest in Corporate Bonds and preferreds, Mortgage Backed Securities, and Treasuries.
Fixed Income Strategy
Sumner uses a top down strategy in the Fixed Income Portfolio in order to determine the portfolio’s duration. To do this we analyze a number of economic indicators to help us forecast the direction of interest rates. This helps us decide the duration of the portfolio. Once we set the duration of our portfolio , we choose securities on a bottom up fundamental basis. We favor corporate bonds with improving credit profiles but we will also invest in Preferreds, MBS and Treasuries.
The portfolio seeks current income and capital appreciation by managing duration as well as credit risk. We believe that by actively managing duration we can outperform the market over time. We also believe that individual security selection is an important part of the total return process.