Intelligent Fixed Income
Investment Objective: The strategy’s investment objective is to provide long-term total return and current income.
Investment Description: The Intelligent Fixed Income strategy was launched on July 1, 2017 and invests solely in fixed income securities, primarily in preferred stock. The strategy has the flexibility to invest in corporate bonds and other subordinated debt securities in addition to holding cash or cash equivalents. The strategy has the flexibility to invest in investment grade, below investment grade or non-rated securities.
Performance Composite Definition: The Intelligent Fixed Income performance composite includes all portfolios invested in the Intelligent Fixed Income strategy. For performance purposes, portfolios enter the composite on the first day of the first full month of management. Portfolios are removed upon completion of the last full month of performance.
Performance: Performance quoted is past performance. Past performance is not indicative of future performance. Current performance may be lower or higher than performance shown. Differences in performance versus the indices may be attributable, in part, to differences in the asset make-up of the Intelligent Fixed Income strategy vs. the indices. Performance calculations are based on the reinvestment of dividends and gains unless these amounts were paid out to the client. Performance is subject to revision.
Fee: The normal fee schedule for the Intelligent Fixed Income strategy is 1.00% on the first $2 million, .75% on amounts greater than $2 million but less than $5 million, and .50% for amounts over $5 million. Individual fee arrangements may vary from this schedule.
Definitions: The S&P U.S. Preferred Stock Index is designed to measure the performance of the U.S. preferred stock market. Preferred stocks pay dividends at a specified rate and receive preference over common stocks in terms of dividend payments and liquidation of assets. The Index consists of U.S. preferred stocks with a market cap greater than $100 million that do not have a mandatory conversion or scheduled maturity within the next 12 months. The preferred stocks trade on the NYSE and NASDAQ exchanges and include floating, variable and fixed-rate preferreds, cumulative and non-cumulative preferreds, preferred stocks with a callable or conversion feature, and trust preferreds. Volume, issuer and issuer selection methodologies also apply.
The iShares Preferred and Income Securities ETF seeks to track the investment results of an index composed of U.S. dollar-denominated preferred and hybrid securities. The benchmark associated with the ETF is the ICE Exchange-Listed Preferred & Hybrid Securities Index, which measures the performance of a select group of exchange-listed, U.S. dollar-denominated preferred securities, hybrid securities and convertible preferred securities listed on the NYSE or NASDAQ. The Underlying Index includes issuances of preferred stocks with amounts outstanding over $100 million, convertible preferred stock with at least $50 million face amount outstanding, and hybrid securities with at least $250 million face amount outstanding, that meet minimum price, liquidity, trading volume, maturity and other requirements, as applicable, as determined by ICE Data Indices.
Disclaimer: Investing involves risk; principal loss is possible. The principal risks of investing in fixed income include interest rate risk: the value of fixed income securities is impacted by changes in interest rates. Bonds with longer durations tend to be more sensitive and more volatile than securities with shorter durations; bond prices generally fall as interest rates rise. Other risks include call risk, credit risk, liquidity risk and market risk. In general, the risks of investing in preferred securities are similar to those of investing in bonds, including credit risk and interest rate risk. As nearly all preferred securities have issuer call options, call risk, income risk and reinvestment risk are also important considerations. In addition, investors face equity-like risks, such as deferral or omission of distributions, subordination to bonds and other more senior debt, and higher corporate governance risks with limited voting rights. Investors should consider the investment objectives, risk, charges, and expenses of this strategy carefully before investing. This and other important information can be obtained by contacting Ulland Investment Advisors.
More Information: This does not constitute a recommendation of any investment strategy or product for a particular investor. To obtain more information regarding the Intelligent Fixed Income strategy, and/or Ulland Investment Advisors, please call Nat Beebe at 612.312.1402 or e-mail nat.beebe@ullandinvestment.com.
