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Customizing Separate Accounts

At Breckinridge, we believe that investment grade fixed income investors are better served by owning a portfolio of individual bonds directly.

Assuming no bond issuer defaults, direct ownership of fixed income securities preserves the option of holding bonds to maturity and helps secure a predictable cash flow independent of market returns. Only investors in fixed income separate accounts can choose to collect their interest payments and hold their bonds to maturity – receiving principal repayment in full and earning a predictable return no matter what broader market volatility might ensue. Thus, even in periods of rising rates, we believe fixed income separate accounts can be a more-stabilizing force for investors.

In contrast, bond fund investors are completely dependent on the market price (NAV) of their fund and, therefore, are fully exposed to market volatility. Moreover, bond fund investors have the added disadvantage of other shareholders, who will typically redeem shares in down markets and thus require managers to sell bonds at distressed prices. This is a distinct and uncompensated risk for bond fund investors.*

With separate accounts, our clients also have significant flexibility to customize portfolio parameters. Breckinridge doesn’t mass produce "cookie cutter" portfolios. We collaborate extensively to determine how we can best achieve our clients’ needs, working with clients and their advisors and consultants to customize portfolios to appropriately align with each client’s objectives, risk tolerances and liquidity requirements.

Breckinridge has built robust systems that allow us to accommodate a wide range of customizations while still keeping portfolios well-aligned with investment strategy. Our portfolios can be customized by benchmark, duration target, credit quality, sector weightings, tax status, state specification and values-based screens. We remain committed to further enhancing our proprietary technology so that we can continue to offer our clients a high level of customization at low fees.


*Some investors may be more suitable for a mutual fund than a separate account. For example, mutual funds tend to have lower investment minimums than separately managed accounts. Investors should speak with their investment professional to determine whether a separately managed account is appropriate for their financial needs and goals.