Investment Overview
Short duration bond management is the most efficient risk/return strategy for overall portfolio diversification. Over the last 10 years, the DBF Short Duration Government/Agency product has captured nearly 90% of the returns to intermediate bonds, as measured by the Barclays Capital U.S. Aggregate Index, with less than half the volatility.
The Short Duration Government/Agency strategy invests exclusively in U.S. Treasury securities, U.S. agency mortgage-backed securities, and fixed maturity federal agency securities. Portfolios have no explicit credit risk, while interest rate and prepayment risks are actively managed. Typically 30% – 40% of the portfolio value rolls off in cash annually due to interest and principal payments, which provides exceptional liquidity and reinvestment opportunity for clients.
Income maximization is emphasized. The total return objective is to outperform the three to five year annual return of the Merrill Lynch 1-3 Year Treasury Index by 50 basis points net of fees. Client portfolios maintain a duration range around the Merrill Lynch 1-3 Year Treasury Index of approximately 0.3 years.
Inception: August 1992
Strategy Assets: $188,104,902
