Concise Capital's investment philosophy is focused on finding value in an inefficient part of the high yield bond market. The result is a portfolio that generates high current income while minimizing credit risk, lowering volatility, and adding diversification.
Our niche strategy looks for value in underfollowed, tradeable high yield issues that turn into cash within three years. The short duration lowers interest rate and default risk while maximizing return, making the strategy more defensive and less volatile than the overall high yield market. The average maturity of portfolio holdings is two to three years. Interest income produces most of the portfolio return with no leverage. We favor bonds of small and mid-cap issuers primarily in the U.S., but also in Canada, Europe, and Australia because they are less researched and more inefficiently priced when compared to larger issues.
We respect capital and focus on risk management. The portfolio is well-diversified across individual positions and industries. To further reduce volatility, we employ a hedging strategy using a liquid ETF, which tracks the Russell 2000. The ETF has proven to be highly correlated to the high yield bond market, particularly during market drops.