The ECM High Yield Bond investment strategy uses active management to purchase and hold high yield bond assets during times when high yield
asset prices are rising. Alternatively, ECM attempts to sell high yield bond
assets when prices are falling to avoid losses.
If ECM is successful, investors will enjoy the benefits of capital gains in addition
to the higher coupon rates paid by this asset class. The strategy will likely produce
short-term capital gains in addition to income. By selling high yield bonds when prices are falling and repurchasing them at lower prices, ECM attempts to increase overall investment yields. Yields rise when prices are falling.
Historically this strategy has generated buy or sell transactions as little as three times
per year to as many as eighteen times per year.
Some high yield assets are not suitable for the strategy,
specifically assets with wide spreads between bid and asking prices or
mutual funds that prohibit frequent trading. The Direxion Dynamic High Yield Bond Fund
is suitable for use with the strategy. High yield bond ETFs are also suitable.
The risks of actively managing high yield bond assets include the inherent
risks of owning high yield assets plus the risks of the active buy and
sell timing transactions being incorrect. Of course the objective of
ECM is to accurately, or as accurately as possible,
execute the buy and sells transactions in a timely manner.
Investors should discuss both the ECM Strategy and the underlying
assets used within the strategy with their financial advisor before investing.
Investors should also read applicable prospectuses before investing.
The strategy is licensed exclusively to Garrett Capital, Inc.
Garrett Capital works through
qualified Financial Advisors to provide asset management to individual investors and
institutions. Please contact Garrett Capital for further information.