TD Lancaster employs a disciplined approach to fixed income management in order to maximize current yield and reduce risk. The process is a multi-step one.

	Long-term economic and interest rate trends are examined and evaluated through the use of proven economic and financial series;
	Based upon our outlook for interest rates we select a risk target for the portfolio, as measured by adjusted duration;
	We add value mainly in three areas: credit analysis which allows us to overweight corporate securities, yield curve analysis which allows us to buy cheap points and avoid expensive points, and duration trading. Interest rate anticipation does not dominate our returns.
	Our typical portfolio will have more corporate securities, more BBB and A rated securities and less volatility than other managers’ portfolios.
	Risk is reduced through diversification. Exposure to any one corporate issuer is limited to 10% and the total exposure to the corporate bond sector will never exceed 75% of total bonds. No more than 30% of the total portfolio will be in BBB bonds.