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.
- 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
- Our proprietary index facilitates completion of step two -
- Through the index, we determine whether inflation will drive
interest rates higher or lower over the next two years.
- 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
- SCM implements our investment strategy by buying and selling
securities to maintain the appropriate durations.
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, Senior Vice
President and 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
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.