Print this page!

Investment Strategy

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.

Suitability and Risk
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.

Your Financial Advisor
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.
How to get the ECM Products
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.