Income Strategy

An Unconventional Approach to Income

Why a Flexible Income Strategy?

Enhance Income: After years of low yields for traditional income investments, many investors are looking to enhance their portfolio with higher yields.

Mitigate Volatility: Non-traditional income sources may offer the opportunity for higher yields and the potential for higher long-term capital appreciation. When actively managed in a single portfolio, alternative income sources’ potential for lower correlations may mitigate excessive volatility.

Why our Income Strategy?

Align Interests: We are the largest individual investors in the strategy, aligning our interests with those of our investors.

Focus on Value: By targeting high-yielding securities at significant discounts to their intrinsic values, we attempt to generate capital appreciation on top of high current income.

Migrate to Opportunity: The Strategy can own almost any type of security across the globe, allowing us to invest tactically in the asset classes we think are likely to generate the best risk-adjusted returns. Income Strategy can own high-yield corporate debt, income-paying common stock, preferred shares, convertible securities, REITs, business development companies, MLPs and more.

Why Now?

Manage Duration: Investors worry about their bond portfolios in a rising-rate environment.  A flexible, actively managed portfolio of income-paying securities may exhibit less duration risk than traditional fixed-income securities.

Stay Active: As an active manager, we have the ability to take advantage of changing market conditions and exercise our patient, long-term approach.

How to Invest

Investment Options: We have options for all types of investors. Have questions? Contact us. We’re happy to help.

Institutional Separate Account – Call us at 410.454.3130 or email us.

Mutual Fund for U.S. Investors

Income Strategy Data — 3Q 2017

All data as of 09/30/2017

Investment Minimum: $50 million

Annualized Performance1

  • Gross of Fees
  • Net of Fees
  • Merrill Lynch US High Yield Master II
  • S&P 500

 

QTD

1-Year

3-Year

5-Year

Since Inception (4/3/09)

Gross of Fees

4.06%

19.78%

4.42%

9.48%

17.03%

Net of Fees

3.80%

18.61%

3.39%

8.40%

15.89%

Merrill Lynch US High Yield Master II

2.02%

9.04%

5.86%

6.39%

12.56%

S&P 500

4.48%

18.61%

10.81%

14.22%

16.88%

Allocation Breakdown2

  • Equity 23.26%
  • Publicly Traded Partnerships (PTPs) 21.18%
  • Bonds 18.57%
  • Real Estate Investment Trusts (REITS) 16.44%
  • Preferred Equity 12.06%
  • Business Development Companies (BDCs) 8.49%
  • Cash 0.60%

Asset Allocation2

  • Common Equity 68.95%
  • Fixed Income 18.54%
  • Preferred Equity 11.91%
  • Cash 0.60%

Top 10 Holdings By Issuer2

  • Carlyle Group LP 6.36%
  • Apollo Global Management, LLC. 5.81%
  • Seaspan Corp. 5.32%
  • Valeant Pharmaceuticals International, Inc. 5.15%
  • New Media Investment Group, Inc. 4.76%
  • Chimera Investment Corp. 4.26%
  • AmTrust Financial Services, Inc. 4.24%
  • New Residential Investment Corp. 4.20%
  • EIG Investors Corp. 4.00%
  • William Lyon Homes 3.41%

Characteristics2

  • Number of Holdings 43
  • Current Yield3 7.94%
  • Annual Turnover 54.90%
The nature of financial markets is such that when the overwhelming consensus is on one side, the investment opportunities usually lie on the other. Bill Miller, CFA December 1992