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| Andrew Harding |
National City Investment Management is favoring investment-grade financials over industrials and has recently put new money into the bonds of companies in the financial sector. Andrew Harding, director of $15 billion in taxable fixed income from Cleveland, invests in the gamut of bond sectors except international bonds. Harding said he prefers financial paper because industrials are more vulnerable to downturns in the economy and have less relative value. He declined to name specific credits, noting he gains exposure through a basket of securities and his views are more sector-specific than name-specific since a single credit does not have a significant impact on his return. Overall, the portfolio is slightly overweight financials, although he declined to specify by how much.
Harding is keeping the weightings and allocations of his portfolios close to benchmark because of the richness of the market. "Credit and mortgages are all relatively expensive," he noted. "Sometimes when all asset classes as a whole are expensive, you stay close to the benchmark until something breaks, and we don't see that happening," he added.
The manager uses more than five benchmarks that span across all durations, including the Lehman Brothers Aggregate Bond Index. Compared to the Lehman Ag, Harding's portfolio holds an 8% overweight in asset-backed securities.
