This excerpt comes from an article titled Eagle Eyes High-Coupon Callable Cor- porates in the January 20,
Question:
This excerpt comes from an article titled "Eagle Eyes High-Coupon Callable Cor- porates" in the January 20, 1992, issue of BondWeek, p. 7: If the bond market rallies further, Eagle Asset Management may take profits, trading $8 million of seven- to 10-year Treasuries for high-coupon single-A industrials that are callable in two to four years according to Joseph Blanton, senior v.p. He thinks a further rally is unlikely, however. Eagle has already sold seven- to 10-year Treasuries to buy $25 million of high-coupon, single-A nonbank financial credits. It made the move to cut the duration of its $160 million fixed income portfolio from 3.7 to 2.5 years, substantially lower than the 3.3-year duration of its bogey... because it thinks the bond rally has run its course....
Blanton said he likes single-A industrials and financials with 9%-10% coupons because these are selling at wide spreads of about 100-150 basis points off Treasuries. What types of active portfolio strategies are being pursued by Eagle Asset Management?AppendixLO1
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