Short Duration Strategy
The goal of Johnson’s short duration strategy is to perform better than the ICE BofAML U.S. Corp & Gov’t, 1-3 years benchmark over time and through time. Since the fixed income portion of a portfolio also serves as a risk diversifier to volatility, we believe it is essential to provide consistent returns each and every year. We seek a high batting average of success without incurring unnecessary risks in the portfolio or making bets. Over time we expect to deliver excess returns with comparable overall volatility to the market, and greater downside risk protection during difficult market periods.
Our primary objective across all duration mandates is to outperform the market with comparable volatility by utilizing our proprietary and unique Quality Yield approach and the deep experience and continuity of our investment team.
Johnson believes that bonds should behave like bonds, especially during periods of economic and market stress. We also believe that the consistent compounding of income drives returns in the bond market. As a result, our strategy employs a quality yield approach.
The cornerstones of our approach are to emphasize investment grade, non-government securities and capture the slope of the yield curve, focusing on building portfolios with a sustainable yield advantage over the benchmark. Investment decisions are made with respect to sector allocation, maturity structure and issue selection that capture the relative value of the bond market for client portfolios.
- Benchmark: ICE BofAML U.S. Corp & Gov’t, 1-3 Years
- 100% investment grade securities
- Typical duration between 80% - 120% of benchmark (110% normal)
- Diversification by sector, issuer and maturity
- Expected annual turnover between 20%-40%
- Typical portfolio holds between 60-80 securities
- No derivatives, no junk, no foreign currency exposure
Performance
Portfolio Statistics
Duration Distribution
Strategy Team
Research Team
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Johnson Asset Management (JAM) is a division of Johnson Investment Counsel, Inc. (“JIC”), an independent and privately owned Midwestern based investment advisory firm registered with the Securities and Exchange Commission. Johnson Asset Management manages institutional separate account portfolios for a wide variety of for-profit and nonprofit organizations, public agencies, public and private retirement plans, and personal trusts of all sizes. It may also serve as sub-adviser for mutual funds. JIC’s fees are available upon request and may be found in our Form ADV Part 2A. Performance data quoted herein represents past performance. Past performance does not guarantee or indicate future results. All data is current as of March 31, 2023 unless otherwise noted. Returns and net asset value will fluctuate. To determine if this strategy is appropriate for you, carefully consider the investment objectives, risk factors, and expenses before investing. Individual account management and construction will vary depending on each client's investment needs and objectives. Investments employing JIC’s strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by any Bank or any Bank affiliate, and MAY lose value, including possible loss of principal. Johnson Asset Management claims compliance with the Global Investment Performance Standards.
The Short Duration Fixed Income composite includes all fee paying, fully discretionary, actively managed institutional fixed income portfolios with a minimum value of $500,000 and an investment objective of short duration, investment grade taxable fixed income. The benchmark for this composite is the Merrill Lynch 1-3 Year G/C Index. The Merrill Lynch 1-3 Year Corporate/Government Bond Index includes publicly issued U.S. Treasury debt, U.S. government agency debt, taxable debt issued by U.S. states and territories and their political subdivisions, debt issued by U.S. and non-U.S. corporations, non-U.S. government debt and supranational debt.
JAM’s policies for valuing portfolios, calculating performance and preparing compliant presentations, as well as a complete list of composite descriptions are available upon request. Please contact our office at 513.389.2770 or 3777 West Fork Road, Cincinnati, OH 45247.
All returns reflect the reinvestment of investment income (dividends and/or interest) and capital gains. Valuations and returns are stated in U.S. dollars. Trade date accounting is used. Portfolio returns are calculated using time weighed return methodology on a monthly basis. Net returns shown reflect gross performance less the highest fee schedule for this strategy.
Actual client returns would also be reduced by brokerage commissions, custodial fees, and other client paid expenses detailed in JIC’s Form ADV Part 2A.