Risk Profile: Conservative/Moderate Growth and Income
The CMG Managed High Yield Bond Program (“Managed HY Bond”) trades high yield mutual funds using a proprietary quantitative buy/sell/hold model. The model identifies opportunities where the short-term and intermediate-term direction of the U.S. high yield market can be predicted with high probability. The strategy looks at daily data such as price, volume, yield spreads and default rates to identify trends.
How it works
- The strategy looks at price movement and current yields to measure and manage risk. The strategy uses price to generate buy and sell signals.
- It is a disciplined rules-based tactical trading strategy designed to minimize economic risk and interest-rate risk. On sell signals, the strategy moves 100% to cash (risk protection).
- Managed HY Bond trades mutual funds to broaden diversification and minimize individual credit risks. There are NO trading costs – we buy and sell at NAV.
- Trading mutual funds also mitigates liquidity risks inherent in buying individual bonds. We believe mutual funds offer the broadest, most cost effective exposure.
Portfolio Diversification and Correlation Analysis: When diversifying your portfolio, it is important to understand how each strategy correlates to your other positions. We believe the key to long-term success is how you weave a number of low-correlating strategies into your portfolio and manage those allocations over time.
Past performance is no guarantee of future returns.
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