Diversified Income Risk-Managed

Diversified Income Risk-Managed (DIRM) is a “go-anywhere” income strategy that aims to enhance total return through non-traditional income sources while maintaining a balanced risk profile and managing drawdown relative to long-only aggressive income strategies.

Objective: Provide robust total return through non-traditional income sources including junk bonds, infrastructure, MLPs, listed private equity, convertibles & preferreds

Primary asset class: Non-traditional income

Tactical ranges:

• 0%-80%: Developed ex-US & EM sovereign bonds
• 0%-40%: High yield
• 0%-40%: MLPs
• 0%-40%: Income equities
• 0%-20%: Specialty sectors
• 0%-20%: Precious metals
• 0%-100%: Duration-managed core US bonds
• 0%-100%: Cash

Target allocation: 100% in non-traditional income assets

Portfolio construction ideas:

• Introduce as “income macro” allocation in aggressive income portfolio
• Use as total return satellite for strategic core fixed income portfolio
• Reduce max drawdown profile of strategic high yield, MLP or special equity allocation