IR+M New Strategy Launch: Short Diversified Income

Income Research + Management (“Income Research” or “the Firm”) today announced that it has introduced
2 min read
Share this post

BOSTON, MA – Income Research + Management (“Income Research” or “the Firm”) today announced that it has introduced a Short Diversified Income Strategy to its investment offerings for its institutional clients. By investing in BB-rated corporate bonds, the strategy is designed to provide more yield than cash or short-corporate products, with less volatility than a typical high-yield strategy.


“Short duration BBs historically have higher returns, but with a risk profile more like investment-grade debt,” said Bill O’Neill, CFA, principal and senior portfolio manager at Income Research, who will serve as the portfolio manager for the strategy. “This approach is ideal for investors who may be concerned about current equity market valuations or longer bond yields and principal risk.”


By opportunistically seeking yield in short duration BB 1-5 year bonds with stable credit profiles, Income Research’s Short Diversified Income Strategy is designed to provide clients with a competitive after-tax yield and reduced duration risk. The strategy also utilizes attractive securitized issues where appropriate for diversification and reduced volatility. It favors higher quality bonds when spreads are tighter and pursues more yield as spreads widen.


Short-duration BBs, as represented by the 1-5 year universe, have similar positive characteristics to the full BB universe, but with lower default- and interest-rate risk. Historically, short-duration BBs have exhibited lower interest rate sensitivity and self-liquidate, which allows for liquidity and reinvestment within the portfolio.


Added O’Neill: “BBs are in a sweet spot. From a risk perspective, BB bonds have more in common with BBB-rated securities than they do with their high-yield counterparts. BBs are often without a natural home in many portfolios, but in our Short Diversified Income Strategy we look for bonds that contain embedded, over-looked value and to invest in markets that offer investors structural and price advantages. While other products may offer higher yields, we believe the compensation is not commensurate with the risk.”


Income Research plans to offer the Short Diversified Income Strategy as a private investment fund as well as a separately managed account for clients. The strategy is benchmarked to the Bloomberg Barclays US High Yield 2% Issuer Constrained BB 1-5 Year Index.

Share this post

Related posts

View All
2 min read

BondBloxx and IR+M launch US tax-aware bond ETF

BondBloxx, an exchange-traded fund issuer specializing in bond ETFs, has joined with fixed-income asset manager Income Research + Management to launch a new ETF designed to maximize after-tax income on a bond portfolio, the firms said on Thursday.

6 min read

Income Research + Management and BondBloxx Launch New Fixed Income ETF that Aims to Maximize After-Tax Income

Partnership between two leaders in fixed income investing brings IR+M’s institutional investment heritage and tax-aware strategy to the broader marketplace for the first time. Designed for investors seeking core bond exposures, TAXX aims to maximize after-tax income by optimizing across a wider opportunity set of short duration municipal and taxable bonds.

4 min read

Income Research Appoints Bill O’Malley Chief Executive Officer

Bill O’Malley to serve as CEO of the $75 billion fixed income manager; he will be supported in the role by an Executive Chairperson, Co-CIO, and COO

Data provided as of January 2, 2024
@ 2024 Income Research + Management. All Rights Reserved.