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 — 1Q 2018

All data as of 03/31/2018

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

-0.71%

8.20%

3.35%

6.45%

16.06%

Net of Fees

-0.96%

7.13%

2.33%

5.40%

14.92%

Merrill Lynch US High Yield Master II

-0.92%

3.67%

5.17%

5.01%

11.76%

S&P 500

-0.76%

13.99%

10.78%

13.31%

16.67%

Allocation Breakdown2

  • Equity 24.95%
  • Publicly Traded Partnerships (PTPs) 22.57%
  • Real Estate Investment Trusts (REITs) 20.00%
  • Bonds 19.36%
  • Preferred Equity 8.00%
  • Business Development Companies (BDCs) 5.12%

Asset Allocation2

  • Common Equity 71.35
  • Fixed Income 19.21
  • Preferred Equity 7.86
  • Cash 1.59

Top 10 Holdings By Issuer2

  • Carlyle Group LP 5.03%
  • Apollo Global Management LLC, Class A Shares 5.00%
  • AmTrust Financial Services Inc. 4.57%
  • Seaspan Corp. 4.45%
  • Abercrombie & Fitch Co., Class A Shares 4.43%
  • New Residential Investment Corp. 4.09%
  • Triangle Capital Corp. 4.05%
  • Endo Ltd. 3.88%
  • Frontier Communications Corp. 3.85%
  • CYS Investments Inc. 3.83%

Characteristics2

  • Number of Holdings 41
  • Current Yield3 7.73%
  • Annual Turnover 37.52%
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