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
Options
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