Investment Grade Fixed Income & Large Cap Equity
Duff & Phelps provides investment grade fixed income and large cap equity investment management for institutional separate accounts. Every Duff & Phelps' product is managed with the objective of controlling exposure to the large variety of risks associated with a given securities market. For our investment grade fixed income and large cap equity products, we believe that the best way to achieve the objective of controlling risk is by investing in high quality, highly liquid securities.
Duff & Phelps' focus on high quality investments results in a relatively low turnover investment process, which is ideal for taxable accounts such as nuclear decommissioning trusts ("NDTs"), VEBA's and Rabbi Trusts in order to maximize the tax efficiency of each portfolio. Separate account management allows us to accommodate each client's specific benchmark and investment guidelines. For taxable accounts, separate account management (combined with lot accounting) permits us to optimize each portfolio's unique tax circumstances - - - active tax-loss harvesting is not practiced.
Duff & Phelps' investment grade fixed income process utilizes the full range of fixed income sectors - - - treasuries, agencies, residential mortgage-backed securities ("MBS"), commercial mortgage-backed securities ("CMBS"), asset-backed securities ("ABS"), corporate bonds and both taxable and tax-exempt municipal bonds. We believe that the most effective way to provide incremental value for a fixed income portfolio is to seek relative value opportunities while consistently managing the portfolio's exposure to a variety of risks, utilizing both qualitative and quantitative analytical tools. Duff & Phelps' strategy for its investment grade fixed income product is to determine the appropriate relative duration, yield curve distribution and sector allocations versus a given benchmark while pursuing a moderate turnover approach of active management of investment grade securities. Our fixed income investment process entails a clear understanding of each portfolio's investment guidelines and applicable benchmark. Fixed income portfolio construction is dependent on benchmark selection and can be significantly different if the benchmark is Barclays Capital Aggregate Index, Barclays Capital Government/Credit Index or (for taxable accounts with relatively high tax rates) a tax-exempt municipal bond index.
Duff & Phelps offers two large cap equity products: Large Cap Passive Equity and Tax-Efficient Large Cap Equity. Our Large Cap Passive Equity product replicates the S&P 100 Index*, whose historical returns have been highly correlated with the returns of the S&P 500 Index and whose holdings have had lower turnover and provide more liquidity than the holdings in the S&P 500 Index. Our Tax-Efficient Large Cap Equity product is a low turnover strategy consisting of 40-50 holdings of well-recognized, high quality domestically traded companies which collectively have a lower P/E, higher yield and higher dollar-weighted market cap than the holdings in the S&P 500 Index.
Duff & Phelps maintains frequent contact with each of its clients so that the investment strategy that is being employed and the reasons for any change in strategy is fully understood. This contact includes, at a minimum, providing quarterly written reports and meeting with clients annually to discuss investment strategy and performance attribution. For taxable clients, Duff & Phelps calculates after-tax returns for each portfolio and the applicable benchmark(s). For those clients seeking highly diversified portfolios, Duff & Phelps is able to supplement its internally managed portfolios by investing in Exchange Traded Funds ("ETFs").
Please direct inquiries to Dave Krause at (312) 917-6548 or Kyle West at (312) 917-6526.
Studies relevant to Nuclear Decommissioning Trusts ("NDTs")
Nuclear Decommissioning Funding Status as of December 31, 2008
Nuclear Decommissioning Funding as of December 31, 2008
NDT Rules and Regulations Summary as of July 2009
NRC Minimum Estimates with Escalation Factors as of December 31, 2009
NDT Fund Conference Presentations
Expected Return / E(R) : A Key Driver in the Asset Allocation Process
Municipal Bond Insurance: Necessary? Or Necessary Evil?
Credit Crunch - The Blame Game
*"Standard & Poor's®", and "S&P 100®" are trademarks of the McGrall-Hill Companies, Inc. and have been licensed for use by Duff & Phelps Investment Management Co. The Product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's make no representation regarding the advisability of investing in the product.