The Eagle Strategic Income Portfolio is a dynamically managed portfolio utilizing the talents of Eagle's Equity Income and Fixed Income teams. We anticipate the long-term allocation mix will approximate a 50-50 blend of stocks and bonds; however, allocations for either asset class may range from 35 percent to 65 percent. Typically, the cash level in the portfolio will not exceed 30 percent.
The team utilizes a number of economic factors to determine optimum stock and bond allocation. Indicators include Fed model, S&P 500 real dividend growth rate, real economic liquidity, stock/bond trend data, trader sentiment, interest-rate expectations and unemployment claims among others. Portfolio co-managers allocate assets based on analysis comparing the relative attractiveness of stocks vs. bonds. The team also collaborates to determine whether a company's stock or its debt is the most appropriate security for the portfolio.
Our Equity Income and Fixed Income managers gather regularly to determine the portfolio's equity/fixed-income allocation mix in an effort to optimize the risk/return opportunities from the available income securities. In addition, the managers meet to discuss bottom-up research on portfolio holdings and potential holdings.
The combined team's goal is to produce high levels of current and future income in dividend-producing stocks and a broad array of fixed-income securities while focusing on stability and participation in the long-term benefits of equity ownership. The single portfolio allows the investment co-managers to strategically adapt their asset-allocation posture to create what they view as the most favorable blend for clients given current economic factors.
The SIP option with tax-advantaged bonds may be of particular interest to those in higher income-tax brackets due to the preferential tax treatment of both dividends and municipals' interest income. The investment process for both SIP portfolios is identical; the only difference is in the composition of the bonds.