Osterweis Strategic Income Fund
Click to Enlarge Managed by the boutique investment management firm Osterweis Capital Management, the The Osterweis Strategic Income Fund’s (OSTIX) strategy seeks to provide capital preservation in concert with long-term total return. The fund typically invests in short-duration high-yield bonds, as well as convertible bonds, to achieve its objectives.
However, the strategy carries the flexibility to allocate anywhere in the fixed-income universe.
It is a “risk aware” strategy, meaning it will adapt to changes in the fixed-income environment, or move to cash in an attempt to shield its investors from an unfavorable investment outcome. This is precisely what OSTIX has done for investors in the weeks following the recent Fed announcement.
Although not an apples-to-apples comparison, when viewed next to a similar passively managed ETF, the PIMCO 0-5 Yr High Yield Corporate Bond Index ETF (HYS), there is a striking performance variation. On a year-to-date basis, OSTIX has not presented anywhere near the same magnitude of price volatility as HYS. I believe this is an excellent indication that the Osterweis fund will continue to make other timely changes to its portfolio to take advantage of the recent correction in high-yield bonds in the second half of 2013.
OSTIX has no sales load and charges 0.91% in expenses, or $91 for every $10,000 invested.