Wilby Securities’ ("WS") Taxable Fixed Income Strategies utilize a unique valuation framework and comprehensive credit review criteria to construct portfolios of durable credits purchased at attractive yields. Credit valuations often exhibit unjustified volatility, presenting an opportunity to enhance fixed income returns through active management. Our disciplined, value-based investment process aims to:
- Preserve capital through independent research
- Invest in credit only when a margin of safety* is present
- Drive portfolio construction with value opportunities
- Adopt a long-term approach
- Foster a culture of transparency, process discipline, and open debate
We meticulously build our taxable fixed income portfolios by analyzing each bond and seeking potentially compelling values through fundamental analysis and a unique valuation framework. We purchase credits with a margin of safety* that varies based on the bond's type and rating, defining a price cushion we believe will prove attractive over the long term, accounting for credit market cyclicality. Our process focuses on durable credits trading at appealing yields.
We aim to invest in durable credits that meet the following criteria:
- Durability: Portfolios consist of issuers with a sustainable revenue model and/or collateral, able to withstand various regulatory scenarios and economic shocks.
- Transparency: We invest in issuers with identifiable and understandable business models and financial structures, avoiding overly complex or esoteric entities.
- Management: Strong management teams are essential for identifying durable credits, favoring those with balanced approaches toward all capital providers.
- Structure: We assess an issuer's ability to generate adequate internal funding to support its capital structure, avoiding excessive debt and over-reliance on capital markets for funding.
*We consider a margin of safety to be present when we can mitigate both business risk (meeting our business, financial, and management criteria with sustainable competitive advantages) AND price risk (purchasing at 75% of our estimated intrinsic value or less).
-Investing in the bond market carries risks, including market, interest-rate, issuer, credit, and inflation risk; investments may be worth more or less than the original cost when redeemed.