Rockwood Capital’s approach to managing fixed income portfolios begins with the belief that high-quality bonds should be the foundation of one’s investment program. Outstanding results can be attained without compromising the integrity of the portfolio by taking on excessive risk. Managing risk and identifying value are essential elements of our approach and key to our focus on relative valuation. While we utilize duration, a most powerful tool, in the active management of fixed income portfolios, it is a stable income stream that cushions volatility and ultimately leads to superior risk-adjusted returns.
Rockwood Capital employs a consistent, disciplined, team-oriented approach to fixed income portfolio management, research and trading. Our investment strategy utilizes a combination of both top down and bottom up analyses in the formulation of our investment decisions, which are developed and implemented by the fixed income portfolio management team. Economic research provides the foundation for our systematic five-stage portfolio modeling and risk management process. Individual security selection is secondary to overall portfolio structure and we gradually adjust the interest rate sensitivity, maturity structure and sector allocation of portfolios to preserve the real purchasing power of invested capital and enhance long-term total returns. For every client, we prudently manage their portfolio’s risk profile in terms of credit quality, liquidity and stability of cash flows.
Inherent in the Trade Execution stage, liquidity analysis is performed to ensure that all trading activity is executed in a timely and efficient manner with minimal transaction costs. Only highly marketable, publicly traded securities are considered, and all transactions are implemented through a disciplined competitive bidding process. We also rely extensively on block trading techniques to execute shifts in portfolio structure simultaneously across client accounts having similar guidelines.
We offer a variety of short-term fixed income solutions for clients seeking a more reliable source of current income than short-term investments, such as money market funds or CD’s, with substantially less principal volatility than the broad bond market average. Portfolios are invested in highly liquid, investment grade securities, with a maximum expected maturity of approximately three years. Portfolio duration will generally be maintained in a range of 1 to 3 years. Custom portfolios are available.