For now, Pollack is employing a barbell strategy focused on floating-rate notes at the short end of the yield curve and bonds in the 10-15 year range. He is also adding new cash to his existing positions, which are allocated 30% to Treasuries, 20% to agencies, 40% to corporates and 10% to taxable municipal bonds. His weighting is neutral in Treasuries, 10% underweight in agencies and 10% overweight in corporates and taxable munipal bonds.
Most recently, Pollack purchased two taxable municipal bonds, the Dormitory Authority for the Albany Medical Center 4.43% of '12s, and the New York State Asset Receivables Program 4.06% of '10s. Pollack said he likes taxable munis because they offer additional yields and diversify his portfolios away from the credit risks associated with corporate bonds.