Stephens Capital Management has built a performance track record in intermediate term bonds that is among the best in the nation. Our success is based on our belief that disciplined management of AAA government and agency bond portfolios will maximize risk-controlled returns over full market cycles.
Return expectations stem from SCM's hallmark investment approach: interest rate forecasting. SCM's thorough investment approach involves a five step process.
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Step 1: We review Federal Reserve monetary policy, which is used to predict inflation up to two years in advance. By adding an analysis of oil prices to the equation, SCM has created a proprietary index that correlates very highly with inflation and parallels interest rates.
Step 2: Our proprietary index facilitates completion of step two - forecasting inflation.
Step 3: Through the index, we determine whether inflation will drive interest rates higher or lower over the next two years.
Step 4: When the monetary model indicates an impending shift in inflation, we alter the duration of our portfolios. For example, if inflation is going to decline, we add longer maturity bonds that will benefit from decreases in interest rates. As interest rates trend downward, the prices of those bonds will increase and we reap the rewards.
Step 5: SCM implements our investment strategy by buying and selling securities to maintain the appropriate durations.
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Skillful Investment Advice - High-quality Client Service
SCM can attribute its strong performance to a rigorous investment process applied by a well-coordinated team of portfolio managers and research analysts. The fixed income team is led by William Tedford, executive vice president and director of fixed income strategy at Stephens Inc. and Alan Tedford, lead portfolio manager at Stephens Capital Management. These expert forecasters are supported by an experienced professional staff.
William is intimately involved in the formulation of the fixed income strategy, overseeing the interest rate forecasting indexes. Alan buys and sells securities to maintain durations indicated on the forecasting index. Both conduct reviews with clients regularly, providing skillful investment advice and high-quality client service.
Latest Commentary - SCM in the News
For the full text of recent articles and commentary from William Tedford regarding SCM's fixed income strategy, visit the SCM in the News section of our site.
