Red Granite offers a balanced portfolio product which blends our growth equity discipline with an interest rate anticipation approach to fixed-income management. With the compounding of interest income as the most important contributor to total return over the long-term, we view bond investments as the income anchor of portfolios, providing additional risk management. Portfolios are actively managed; we emphasize call protection and avoid derivatives. Fixed income portfolios are positioned to produce the best total return within acceptable risk parameters.

Asset allocation decisions on the relative attractiveness of stocks and bonds, the interest rate outlook, and the structure, maturity, and duration of fixed-income portfolios are made by the Investment Committee. Analysis begins with an outlook for the economy, emphasizing business cycle trends, fiscal and monetary policy initiatives, the direction of inflation, the credit/supply demand balance, and the relative attractiveness or valuations of competing market sectors.

Reflecting the risk and return assumptions of our investment philosophies, Red Granite’s asset allocation range for equities is 45% – 65%, with the balance invested in high-quality fixed-income securities and cash equivalents, depending on the duration desired. We further adhere to the following fixed-income portfolio guidelines:

	allowable investments in treasuries, agencies, and high-grade corporates; securities are to maintain a minimum a-rating by moody's or standard and poor's.
	the average-weighted portfolio maturity will not exceed ten years and the portfolio duration is set within a range of 25% above-or-below the duration of a clients bond benchmark.
	investments in the corporate debt securities of any one issuer will be limited to 10% and no security will comprise more than 5% of the market value of the outstanding security issued by any corporation or governmental agency. We invest in liquid and readily marketable securities.