Mortgages, asset-backeds and Treasuries each account for 15% of the firm's total assets. Gifford did not give a target figure for the new allocations but said any changes would be minor. He declined to name specific credits.
Elsewhere, Gifford plans to maintain his existing allocations but will rotate among investment-grade corporate names, which account for roughly 35% of the portfolio. "The corporate bond market is not as attractive as it was a year ago, since spreads to Treasuries have tightened significantly as corporate earnings improved," he says, adding that corporate bonds will continue to perform well as long as quarterly earnings keep increasing.
Gifford adds the recent jobs report makes it less likely the Federal Reserve will raise rates for the time being and bodes well for T-bills, although he's still generally less positive on govvies than on other sectors. He expects the Fed to remain on hold until early next year.
