Bond Protection Portfolios

Most bond investors know that rising interest rates can cause huge losses in bond portfolios, regardless of whether we are talking individual bonds or bond funds. With bond prices still trying to recover from shocking declines last summer and this spring, our new Bond Protection portfolio, first offered in May, is attracting interest from high-net-worth investors. In this strategy we will apply hedging techniques striving to substantially cushion bond prices from the risk of rising interest rates. The neat thing about this strategy is that clients can continue to hold their bonds and collect interest.

Bond investors normally invest in bonds due to their relative safety compared to stocks. But my calculations show that a 20 year bond will loose over 20% of its value if interest rates go up 2%. Longer bonds will lose even more. If you recall how high interest rates went in the early 1980’s (into the teens) you can see why I say the potential for loss is huge.

If you have large bond holdings call for an appointment to see if our Bond Protection portfolios might help you reduce the risk of holding your bonds in this uncertain environment. And if you have friends who invest in bonds, tell them too, please.

Core and Satellite-Multi Manager Portfolios

Hepburn Capital participates in a group of several hundred money managers. which includes many of America’s best “boutique” investment managers. We now have the technology in place to have several managers participate in managing a single account. This allows us to not only bring in some of the best talent around to manage your money, but to change the lineup of managers depending upon the markets, too. We expect Hedge Fund type performance from these accounts but without all the disadvantages of Hedge Funds.

We currently have 50% of the money in these accounts with two “bear market managers” - ones who have shown an ability to make money in down markets, - 25% with a growth manager, and 25% which we are managing in-house.

These two portfolios have higher minimums that some of our earlier programs, so they aren’t for everyone. Please call for an appointment if you are interested. 717-0007.