67 WALL STREET, New York - December 18, 2012 - The Wall Street Transcript has just published its Best Investment Strategy Interviews of 2012. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Investment Strategies - Large Cap Investing - Investing in Emerging Markets - Investing in Energy - Value Investing - Downside Protection With Upside Participation - Macroeconomic Trends
Companies include: Vanguard Total Bond Market ETF (BND), PIMCO Total Return ETF (BOND), iShares Barclays TIPS Bond (TIP)
In the following excerpt from the Best Investment Strategy Interviews of 2012 Report, an experienced fixed income portfolio manager discusses the outlook for these markets for investors:
TWST: Would you begin with a brief introduction to JKMilne Asset Management, including some highlights from the firm's history, an overview of your client base and your total assets under management?
Mr. Milne: I began in the investment management industry at Marine Midland/HSBC in 1977 and then moved into managing the fixed income portion of what is now the Northrop Grumman pension fund from 1979 to 1985. In 1985, I moved to Mellon Bank and helped create an investment subsidiary called Mellon Bond Associates and had the privilege to work there from 1985 to 2003. In 2003, I decided to consider the future with the increasing volatility of the markets. Interest rates, in fact, were quite low in 2003 and 2004. In 2004 I decided to open a boutique for the management of institutional-only fixed income. We opened in August of 2004. Our first client funding was in October of 2004, and this was at a time where interest rates were low, but the Fed, in fact, had begun monetary tightening by increasing interest rates that lasted 17 repetitions so it was an interesting time to launch a fixed income boutique firm.
I've been in fixed income my entire career, going back three decades. My undergraduate degree is in economics and chemistry, and my master's is in economics. So it's really been, oddly enough, a passion my entire career, and that passion for it has not diminished at all in the years.
The firm has grown steadily in the period from late 2004 to current. You asked about important dates. We believe that an important event in the history of the firm was in 2008. We were named Bond Manager of the Year by Institutional Investor's publication for nonprofits, foundations and endowments. That really started to cement our credibility, and clients were open about working with an extraordinarily experienced team unique to the industry. We really don't have a marketing or sales machine, much less a department. Word of mouth is actually how we've grown. We currently have about $1.7 billion in assets. Our clients are what we would describe as "big thinkers" - they are large, and they are sophisticated. They like to stay quiet, and we don't necessarily share their identity.
TWST: You mentioned you are focused on fixed income, and I know that's a big part of the strategy. Would you elaborate a little bit for us - how would you describe your asset management philosophy and what do you think makes it unique?
Mr. Milne: I think what makes our philosophy unique is our focus on investment-grade bonds only for alpha by focusing on a top-down model approach. The markets had then gone through a period of time where interest rates were very high in the 1980s. When interest rates came down, a lot of money was made. Then in the 1990s there was a move towards what we call "core plus," and investors started to look for returns outside of the indexes, and they would go into a very successful emerging markets high yield and preferreds. What we decided was that the market was dynamic enough and powerful enough that we can create value through investment-grade, large-cap industries - through these highly liquid issuers, we could create value and share success.
We feel it is unique, that is the whole idea that value can be created without looking for a credit risk but rather avoiding certain issue-specific risks...
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
- Investment & Company Information
- fixed income
- Interest rates