A former CEO came to us looking for a different way to manage his large portfolio of individual bond investments. He had a $7 million bond portfolio in a brokerage account, which his longtime advisor managed. Both the investor and the advisor were concerned about the new demands of the bond market and wanted a better way to manage the portfolio while investing $4 to $5 million in maturing certificates of deposit (CDs).
The bond market at the time presented a host of challenges for managing a portfolio of individual bonds, including heightened concerns around credit risk and the potential for higher interest rates. Municipal bond investors working without professional advice also found it challenging to uncover value in a lower-rate environment with limited access to attractively priced bonds.
Being familiar with Parametric's established reputation in the muni market, the advisor recommended that the investor switch to a Parametric municipal bond ladder portfolio. This would allow the investor to benefit from our large and experienced credit research team, our institutional purchasing power and access to new issue, and the defensive nature of a laddered investment approach to protect against rising interest rates
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