Overview
Our primary goals are long-term, consistent investment performance and exceptional client service. We achieve these goals by maintaining a consistent process for managing risk and a complete focus on developing strong client relationships.
Sterling Capital's Fixed Income team strives to deliver consistent, superior risk-adjusted performance over time through a multi-faceted approach to investing. Based on our team's forecast for the broader economy and specific market sectors, we utilize a variety of strategic and tactical levers that allow us to construct portfolios for any type of market environment.
Fixed Income
Insights
09.04.2024 • Charles Wittmann, CFA®
The Lead - Dividend Opportunities
- As we enter September, it appears the Federal Reserve is prepared to lower the federal funds rate at their September 18, 2024 meeting. - Historically, dividend payers have outperformed non-dividend payers after the first cut. - One may question if historically it has been better to own high yielders versus dividend growers, and if it has been better to own slower or faster dividend growers. We address these topics in this month’s piece.
08.29.2024
Guardian Capital buys Sterling Capital Management from Truist
(pionline.com) Guardian Capital, a wholly owned subsidiary of Guardian Capital Group, will acquire investment manager Sterling Capital Management from Truist Financial.
08.27.2024 • Andrew DiZio, CFA®
Higher Interest Rates & REITs - Looking Ahead at Lower New Supply
The market has spent much of the last two years fixated on the negative effects of rising rates on Real Estate Investment Trust (REIT) share prices. What has received less attention is the slowdown in new developments of commercial and multifamily real estate due to higher interest rates and the potential for higher rents in coming years should consistent demand growth be unmet by new supply. We believe publicly-traded REITs, which derive much of their earnings growth from existing real estate rather than new development, are overlooked future beneficiaries of this construction slowdown.
08.13.2024
James Kerin, CFA®, Michael McVicker
Energy prepayment (prepay) bonds enable municipal utilities to lock into a discounted price on a long-term supply of energy, most commonly natural gas or electricity. Issued by special purpose authorities, bonds are structured with far-dated final maturities but shorter-dated mandatory tenders that are backed by the obligation of a bank or insurance company, known as the guarantor, to ensure that it occurs in order to return principal to bondholders. As a result, prepay bonds are ultimately a corporate credit exposure in the tax-exempt market. The final maturity matches the term of the energy supply contract and improves the bond’s market discount tax treatment, while the shorter-dated tender serves to optimize borrowing costs within the transaction.
08.01.2024 • Charles Wittmann, CFA®
- Low quality and risk performed well in the first half of 2024. - As a result of more tepid inflation data supporting a potential reduction in the federal funds rate, we believe the market began anticipating that lower rates may aid companies that need stress relief from the higher interest payments placed on their businesses. - Evidence of this stress can be seen in how companies in the S&P 500 Index began reducing the growth rate of dividends they pay their shareholders as cash flows become more difficult to generate. - We believe quality companies that increase rather than decrease their dividends and signal their financial strength through short- and long-term environments may be a formula for client success.
08.01.2024 • Andrew Richman, CTFA
“Better Balance” Increases the Odds for a September Cut
Andy Richman's update on the July Federal Open Market Committee meeting.
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