Looking Under The Hood Of Highland Capital Management’s Signature Fixed Income Fund

 

Highland Capital Management (HCM) is fortunate to count some of the world’s most powerful investors among its clientele, and the firm is famous for identifying lucrative opportunities in fixed-income markets.

Highland Capital is among the most successful and largest firms operating in the financial sector today. It was co-founded in 1993 by James Dondero and Mark Okada. Mr. Okada recently announced his retirement after more than 25 years with Highland.

Given its history, it should come as no surprise that the “HCM Fixed Income Fund” is among its most popular investment offerings. In keeping with its title, the HCM Fixed Income Fund offers institutional investors the potential for superior yield against the S&P 500. Unlike a traditional equity fund, however, the HCM Fixed Income Fund offers this yield without the risk of stock prices falling.

Fixed-income investments are not new, but Highland Capital Management leaders are often noted for their unique approach to leveraging these vehicles. The HCM Fixed Income uses investment-grade debt to build a solid foundation for its portfolio, and United States Treasury Bonds comprise a hefty portion of these holdings. In addition to Treasury Bonds, the portfolio also includes asset-backed securities, money market paper, and long-term corporate bonds.

John Hakopian, the Fund’s leader, strives to create a portfolio of debt that features an average of between 5 and 10 years. This helps the portfolio remain balanced, and it also decreases the price sensitivity of its assets.

The HCM Fixed Income portfolio is currently comprised of securities and assets from: The United States Treasury (1.7%) – United States Treasury bills provide a guaranteed rate of return, and many market participants view them as truly risk-free. Visit This Page for additional information.

Government National Mortgage Association (1.7%) – First founded in 1968, the Government National Mortgage Association (GNMA) is a government-backed corporation that is technically an arm of the Department of Housing and Urban Development. As housing prices continue to recover, investments in GNMA are increasing in value.

FRESB Mortgage Trust (1.5%) – As a government-sponsored entity, the FRESB Mortgage Trust offers an added degree of security for the HCM Fixed Income Fund. Go To This Page for more information.

JPMorgan Chase & Co. (1.7%) – As one of the largest banks in the world, many experts feel that JPMorgan Chase & Co. makes for an extremely attractive investment under any set of market conditions. The bank was one of the only financial institutions to emerge from 2008’s financial crisis in better shape than before, and the JP Morgan brand has only gotten stronger over the last decade.

 

Source: https://www.highlandcapital.com/about-us/