Long Duration

Description

The Long Duration Fixed Income Product seeks to maximize total return, minimize volatility, and preserve capital, utilizing all sectors of the fixed income market, including high yield and non-U.S. dollar denominated securities. Long Duration portfolios are high quality and well diversified, with an average portfolio duration generally above eight years.

A long duration portfolio is often utilized by a pension plan sponsor as part of a broader liability-driven investment (LDI) strategy. For information on our capabilities with respect to custom LDI strategies, please visit our Liability Driven Investing topic page.

Portfolio Highlights

As of September 30, 2017
Reams Barclays Long G/C
Average Duration 14.4 Years 15.4 Years
Average Maturity 21.2 Years 24.2 Years
Yield to Maturity 3.6% 3.6%
Average Quality AA3 A1

Sector Summary

As of September 30, 2017


Reams Barclays Long G/C
Corporate 45% 51%
Asset Backed < 1% 0%
Gov't Related 2% 10%
Cash & Equivalents 1% 0%
Treasury 42% 39%
Mortgage Backed 9% 0%

Performance


Annualized Performance as of September 30, 2017
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs. Since
Inception
Long Duration (Gross) -0.44% 5.59% 4.29% 10.69% 9.58%
Long Duration (Net) -0.57% 5.45% 4.14% 10.50% 9.36%
Barclays U.S. Long G/C -0.79% 5.45% 3.94% 7.36% 7.21%

The Annual Disclosure Report is an integral part of this presentation and is available for download in Adobe Portable Document Format (PDF) by clicking here. PDFs are viewed using Adobe Acrobat Reader.

Important Disclosure

Past performance is no guarantee of future results. Performance figures are in U.S. Dollars and assume reinvested income for the entire period. Performance figures stated gross of fees do not reflect the deduction of management fees. Performance results of clients would be reduced by the firm’s management fees. For example, an account with a compounded annual total return of 10% would have increased by 159% over ten years. Assuming an annual management fee of .30%, this increase would be 152%. The firm’s management fees are detailed in its Form ADV Part 2. All investments involve risk, including the possible loss of principal.

Reams Asset Management is a division of Scout Investments, a registered investment advisor that offers investment management services for both managed accounts and mutual funds. Scout Investments is a wholly owned subsidiary of Carillon Tower Advisers (CTA), which in turn is a wholly owned subsidiary of Raymond James Financial.

The firm was previously defined as UMB Institutional Asset Management, a subsidiary of UMB Bank, which managed both institutional and high net worth, trust, and estate assets. On July 1, 2009 the firm transitioned from UMB Bank and became a subsidiary of UMB Financial Corporation in order to focus on institutional investment management. On November 30, 2010, the firm acquired the advisory business of Reams Asset Management Company, LLC. On December 28, 2010, the firm changed its name from Scout Investment Advisors to Scout Investments. On November 17, 2017, Scout Investments was acquired by Carillon Tower Advisers.

Employees of Scout Distributors receive referral fees and compensation for soliciting clients on behalf of Scout Investments, including the Reams Asset Management Division. Scout Investments claims compliance with the Global Investment Performance Standards (GIPS®).

The Long Duration Fixed Income Strategy invests primarily in investment grade securities, while maintaining an average portfolio duration of generally above eight years. The Long Duration Fixed Income Composite may invest in derivatives, including credit default swaps and related instruments, such as credit default swap index products. These derivative securities may be used to enhance returns, increase liquidity and/or gain exposure to certain instruments in the market (such as the corporate bond market) in a more efficient or less expensive way. The Composite may also invest in interest rate derivatives to manage duration and yield curve exposure. Derivatives used are strictly constrained by client investment policy. The Barclays Long Term U.S. Government/Credit Index is an unmanaged index of U.S. Government or Investment Grade Credit Securities having a maturity of 10 years or more.

The bond quality ratings indicated are assigned by credit rating agencies Standard & Poor’s, Moody’s, and Fitch as an indication of an issuer’s creditworthiness. Unless specified by client investment guidelines, the middle of three or highest of two credit quality ratings available from these rating agencies is used. Credit quality is subject to change. Ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest). Ratings information from Standard & Poor's (“S&P”) may not be reproduced. S&P credit ratings are statements of opinion and are not statements of fact or recommendations to purchase, hold, or sell securities, nor do they address the suitability of securities for investment purposes, and should not be relied on as investment advice. S&P does not guarantee the accuracy, completeness, timeliness or availability of any information, including ratings, and is not responsible for errors or omissions (negligent or otherwise). S&P gives no express or implied warranties, including but not limited to any warranties of merchantability or fitness for a particular purpose or use. S&P shall not be liable for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including lost income or profits and opportunity costs) in connection with any use of ratings.