SAM BondPlus
What is BondPlus?
The BondPlus strategy offered by Stansberry Asset Management, LLC (“SAM”) is an actively managed strategy focused on tactical security selection across the fixed income universe. This investment grade-like strategy is designed to have much less volatility than equities. We aim to capitalize on relative value opportunities, particularly across neglected asset classes like unrated securities and busted convertible bonds.
The Benefits of Active Management in Fixed Income
Fixed Income markets are not as efficient as the equity markets. The asset class is fragmented and dominated by non-economic investors who trade bonds with intentions other than generating profits.
Passive credit indices are difficult to replicate. Fixed income universe is large and complex, and trading costs can be great. Also, turnover is higher as rating upgrades/downgrades continually contribute to an evolving index. Finally, large passive ETFs impose minimum size requirements, meaning only the largest issues can be owned.
Passive managers trading decisions are often dictated by agency actions. Indices are often forced to sell bonds after a rating downgrade, and thus after they have fallen in price. Conversely, they are also forced to buy bonds after a rating upgrade, after the bond price has increased. Active management can identify credit deterioration/enhancement before it occurs.
Key Features of the BondPlus Strategy
Unrated securities offer significant potential for enhanced returns. Oftentimes, investors incorrectly believe that unrated bonds are riskier. Consequently, they typically trade for higher yields relative to rated bonds with similar levels of credit risk.
Busted convertibles may also significantly contribute to enhanced returns. Because of their nascent equity-like characteristics, and their strong credit fundamentals, this overlooked asset class may often possess very attractive asymmetric return profiles. SAM believes that through rigorous fundamental research, this PLUS component can meaningfully contribute to greater total risk-adjusted returns.
Frequently Asked Questions
The SAM BondPlus Strategy is an actively managed fixed income strategy that seeks to generate consistent income, reduce volatility, and tactically allocate across different sectors of the bond market. It goes beyond traditional bond portfolios by incorporating non-traditional income sources and using research-driven security selection.
BondPlus is designed for clients seeking an income-producing, lower-volatility investment strategy, with a primary emphasis on fixed income instruments; and/or clients who want to take advantage of the higher yielding environment with a portfolio capable of producing stable income generation through fundamental research and tactical security selection.
Unlike typical bond index funds or passive strategies, BondPlus is actively managed and unconstrained by benchmarks. The strategy can rotate between sectors, adjust duration, and identify underappreciated income opportunities that traditional portfolios might miss—such as busted convertibles or short-duration corporate debt.
The strategy typically holds approximately 15–20 positions. This focused portfolio allows for targeted, high-conviction investments in income-generating securities.
Sample holdings may include:
- Investment-grade corporate bonds
- U.S. Treasuries and T-Bills
- Mortgage-backed securities
- High yield debt
- Convertible bonds
- Preferred securities
A busted convertible bond is a type of convertible bond that is trading well below its conversion price, meaning it acts more like a traditional bond than a stock. These securities often offer attractive yields and are included in the strategy when they present a compelling risk/reward profile.
Yes. BondPlus is designed to be flexible in changing market conditions. Its shorter average maturity and tactical allocation can help reduce interest rate sensitivity and preserve capital in a rising rate environment.
Risk is managed through diversification, proprietary credit scoring, and scenario testing. The strategy uses SAM’s internal credit ranking system, which assesses issuer strength, debt structure, industry trends, and overall risk profile.
While returns will vary with market conditions, BondPlus is focused on consistent income generation and downside protection. If you would like to learn about current returns, please reach out to us directly.
To learn more or to see if BondPlus is a fit for your goals, you give us a call at 646.854.4370 or schedule a consultation with a team member at SAM here: https://www.stansberryam.com/get-started/
Want to learn more?
Curious if BondPlus could be a fit for your portfolio? Whether you’re simply exploring or ready to take action, we’re here to walk you through the approach, answer your questions, and help determine if it aligns with your financial goals. This is completely complimentary. Just a conversation to see if we could be the right fit for you and your family.