PRIME BROKER SERVICES II:
If market conditions warrant, UASI will actively trade bonds, basing our decisions on changes in interest rates, issuer credit quality and current tax laws. Being independent and having access to a variety of issues is part of our tactical approach.
BENEFITS:
•  Tax Selling: Bonds can be sold, if at a loss, to offset capital gains from stocks, real estate and other income. Due to the availability of many bond issues, we can purchase a replacement that meets your needs for maturity, credit quality and price and not be negatively affected by the 30 day Wash Rule.
•  Principal Protection: If rates are likely to decline, it is appropriate to extend the maturity of fixed income holdings and increase call protection. This reduces reinvestment risk of principal and positions the bonds for appreciation as rates trend down. If we think rates may increase, we reduce the average maturity in the portfolio by swapping into shorter maturity bonds. This may lower the yield but the portfolio’s value will not depreciate as much. During an economic downturn, we shift our bond portfolios to higher quality issues, as they retain their value better than lower quality bonds in this environment.