There is no mystery in fixed income investing. There are only two objectives: receive steady stream of income and preserve the capital. The income you receive from the fixed income portfolio depends on the duration of the bonds, and on their quality. The longer the duration, the higher the yield and the lower the rating of the bonds, the higher the income. On the other hand, bonds of higher duration are riskier: they are subject to interest rates fluctuations and subject to the reinvestment risk, and bonds of lower quality are subject to various financial risks, including the financial solvency of the company (think Enron).

With these goals in mind, we designed an investment program for fixed income portions of our clients' portfolios: Vega Safety.

Vega Safety is a traditional fixed income portfolio. Using the mathematical models we developed, the portfolios are structured to meet clients' investment objectives and cash flow requirements. We analyze the interest rate environment, investigate the Interest Rate Risks, Yield Curve Risks, Reinvestment Risks, Credit Risks, Liquidity Risks, Inflation Risks, Volatility Risks, and Event Risks, superimpose that with clients' individual objectives, and developed a laddered structure of the portfolio. We use a full spectrum of fixed income instruments including US Treasury securities, Treasury STRIPs, federal agency securities, municipal securities, corporate debt instruments, asset-backed securities, international bonds, and traditional preferred stocks. It is the ability to analyze the full spectrum of fixed income securities that allows us to create highly customized fixed income portfolios for each client.