The portfolio management team
meets formally twice a week to
review the economy and its impact
on securities markets and client
portfolios. The team regularly
reviews sector and duration
targets for each fixed income
portfolio and discusses any
adjustments that need to be made.

Customized Portfolios

CCM provides customized portfolio management services. Our account minimum requirement is $5 million. This relatively low minimum, particularly for institutional accounts, offers clients the ability to receive both customized portfolio management in conjunction with superior client service. Many larger investment management firms have much higher minimums for separate account management.

Two common customized portfolio types include Socially-Responsible Investing (SRI) and Crossover Strategy.

Crossover Strategy

A crossover strategy offers a more aggressive method of fixed income investing for a tax-paying institution. In a crossover strategy, Cavanaugh Capital Management (CCM) alternates between taxable and tax-exempt bonds in client portfolios.

The yield relationship between tax-exempt municipal bonds and taxable bonds is not constant. Thus, the decision to move between taxable and tax-exempt bonds in a portfolio depends upon the relative value between the two markets for securities of similar credit quality, duration and call protection. In managing a crossover portfolio, CCM analyzes historical trading relationships between tax-exempt and taxable bonds, as well as supply and demand in the primary and secondary markets. These inputs help the investment management team determine whether taxable or tax-exempt bonds represent superior value. CCM has expertise in managing both taxable and tax-exempt bond portfolios. This multi-market perspective is mandatory in crossover portfolio management.