Balanced Accounts
Our Balanced Accounts are an efficient and straightforward way to combine equity and fixed income exposure in a single account, while providing diversification and lower volatility. Clients may elect to allocate a portion of their equity portfolio to fixed income exchange-traded funds (ETFs), with a range of allocations available. Fixed income ETFs are available in a wide variety of maturities across corporate, agency and treasury sectors. We actively monitor the ETF selection to ensure that our portfolios match their objectives. Balanced account management easily accommodates systematic deposits or withdrawals and includes automatic rebalancing. Clients may choose a balanced account by selecting a fixed income allocation, which may be combined with most of our equity products.
The professionals at Confluence were among the first to understand how to utilize fixed income ETFs in separately managed accounts. Within the fixed income allocation, we strive to deliver the income and lower volatility traditionally available from a diversified bond portfolio. Fixed income ETFs are available in a wide range of maturities across corporate, agency and treasury sectors and over time we will adjust the allocation across these sectors. We may also adjust the average maturity depending upon our interest rate outlook. The allocations will incorporate our viewpoints regarding Fed policy, the shape of the yield curve, relative yields (known as spreads), default rates and other market factors. With the development of the fixed income ETF market, we are able to efficiently bring together common stocks and securities that have the characteristics of bonds into a single account.
Balanced Accounts are available to both new and existing clients investing in our equity strategies. Clients indicate the proportion they would like to allocate to fixed income ETFs. We offer an allocation range of 30% to 70% in fixed income ETFs, in increments of 10%. Below are two illustrations of combining one of our equity strategies with fixed income to create a Balanced Account.