The fairly conservative Medium Duration Income Portfolio has broken through to the green finally. While it is just up a small amount we are pleased. Anytime we build a model we have to wait a month or two for dividends and interest to start flowing to the account so a lag is expected. The portfolio was launched on 2/8/2018.
This model portfolio almost mirrors our personal holdings, but is just a $100,000 model so it has fewer total holdings than we personally have in multiple accounts.
The portfolio is about 80% invested with 9 different holdings so there is room for 1 or 2 more purchases in the days ahead.
A couple items of note. The Arbor Realty 7.375% baby bonds (NYSE:ABRN-CL) have been called for redemption on 4/27/2018. The issue is trading at $25.29 and should redeem at around $25.47–we are letting this issue run out to redemption. This means that we will have another $10,000 to get invested.
The 2nd item is that the Atlas Financials Holdings 6.625% baby bonds (NASDAQ:AFHBL) took a bit of a drubbing (down 65 cents now after recovering from steeper losses a few weeks ago ) last month when the insurance company announced a large, unexpected reserve charge. They also delayed SEC filings and earnings release. Earnings have now been released and the company is expecting $2/share net income for 2018. Hopefully they will remain on track for the year as we have are not fond of holding bonds from ‘slackers’.
We will look to make a purchase in this portfolio later this week and then again at the end of the month when Arbor Realty proceeds come in.
Disclosure–we personally hold quite a bunch of the Arbor Realty baby bonds and a small position in the Atlas Financial baby bonds.