
Wind
Early to mid cycle economy
Steady economic growth
Potential for rising rates
Compelling spread
Steep yield curve
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Shorter than benchmark duration
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Overweight Corporates and FRNs; underweight Treasuries and Mortgages
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Favor BBB
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Active trading for yield
Waves
Late economic cycle
Expectation of inflation ahead
Restrictive monetary policy
Spreads are narrow; could widen
Flattening yield cure
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Duration neutral to slightly overweight benchmark
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Sectors neutral to benchmark
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Favor AA to A
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Trading: Favor issuers with stable ratings and stable leverage
Weather
Economic growth slowing
In, or on cusp of, recession
FOMC is exiting/changing policy
Spreads widen; possible inverted curve
Volatility and uncertainty
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Duration longer than the benchmark
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Build positions in Credit, FRNs and MBS opportunistically
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Buy quality income at the right price to increase yield
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Trading: Adjust sectors and quality



The JKMilne Edge
"Anyone can hold the helm
when the sea is calm."
. . ...Publilius Syrus (85-43 BC)