FIXED INCOME REPORTING
The Fixed Income segment of the Quarterly Report provides detailed information about the fixed income portion of your portfolio. There are two sections: Fixed Income Summary and Fixed Income Distribution. The former is a detailed, numerical view of your fixed income portfolio, while the latter displays information about your portfolio in graphical form.
The Fixed Income Summary report is comprised of virtually all of the information you would want to know about your fixed income portfolio. From left to right, we start with the description of the bond (ex: “CVS CAREMARK CORP 5.750% Due 06-01-17”), which tells you the name of the entity responsible for paying you interest and principal on the bond. Next is the “Market Value” of the bond (ex: 15,962), which is the market value of that individual bond on the specified date. Following that is the “Units” column (ex: 15,000.00), which is also the amount of par value (principal) you will be paid back on that individual bond. Then, we show the “Coupon Rate” (ex: 5,750%), which is the amount of annualized interest paid on the bond. Next, we show the “Maturity Date” (ex: “6/1/2017”), which is the date the final interest payment will be made and when you receive back the par value of the bond. We then show you the “S&P Rating” (ex: “BBB+”) – we only buy high quality investment grade bonds for our clients’ portfolios. The most important column in the report is next – “YOC” or Yield on Cost (ex: 4.5%). This is also known as “Yield to Maturity (YTM).” This is the annualized return on the bond that we locked into when we bought the bond in your portfolio. Lastly, we show the “Mod. Duration” (ex: 1.4), or Modified Duration, which is a measure of the sensitivity of that particular bond to a change in interest rates. At the very bottom of the report in bold font is the “Portfolio Summary,” which totals/averages the columns.
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The Fixed Income Distribution is a report that shows two graphs that detail the maturity distribution of the portfolio. The first is broken down by specific year of maturity. We build bond ladders, and in general you will see investments across the varying maturities not typically exceeding 15 years out, with most of the bonds maturing in less than 10 years. The second graph is a more general summary of the bonds in different maturity groups (ex: < 1 Year, 3-5 Years, 7+ Years). This will give you a better idea of how we have your fixed income portfolio structured with respect to a more general time horizon.
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Fixed income is the bedrock of your portfolio at B&C Financial Advisors, and we are happy to review in greater detail any of the aspects of your fixed income holdings with you. We are also happy to review your overall portfolio or assist you with any financial planning/retirement planning issues. Give us a call at 904-273-9850 or email us at firstname.lastname@example.org.