Carr & Associates
constructs portfolios utilizing primarily investment grade
securities. Issues are selected for their credit worthiness,
risk aversion and yield support characteristics as well as for
longer term appreciation potential. Holdings are sold when
they no longer possess these qualities. Portfolios typically
contain 10-25 issues, diversified across industry groups.
Clients own convertible bonds and/or convertible preferreds, or on
rare occasions, and for brief periods after conversion, the common
stock of previously held convertibles. As of December 31, 2007,
the holdings of our clients' bond portfolios had an average Standard
& Poor's quality rating of BBB, and, excluding zero coupon
positions, generated a current income return of 3.5%.
Carr & Associates is noted
for the consistency of its returns. As the table below
demonstrates, the Carr & Associates convertibles composite has
shown returns averaging 6.5% to 8% a year, whether over 3, 5, 7, 10
or 15-year periods. Over all of these time periods the Carr & Associates
composite has provided a superior risk-adjusted return or Sharpe
Ratio. Carr & Associates' performance results
are shown net of management fees paid to Carr &
Associates.
Convertible Securities
Total Return Comparisons
Periods Ending
December 31, 2007
|
|
|
Sharpe |
| Index; |
Return |
Risk |
Ratio |
| ---------------3
Years--------------- |
| Carr & Associates |
6.64 |
3.42 |
0.72 |
| Lehman Govt/Credit Bonds |
4.44 |
3.15 |
0.08 |
| Citigroup High Grade LT Bonds |
3.90 |
7.08 |
-0.04 |
| 60%S&P500/40%LG/C Bonds |
7.02 |
4.59 |
0.62 |
| Carr
Convertible Preferreds |
5.06 |
6.24 |
0.14 |
| S&P 500 |
8.61 |
7.79 |
0.57 |
| 90-Day
Treasuries |
4.18 |
1.22 |
0.00 |
| ---------------5
Years--------------- |
| Carr & Associates |
7.88 |
3.25 |
1.50 |
| Lehman Govt/Credit Bonds |
4.44 |
4.29 |
0.34 |
| Citigroup High Grade LT Bonds |
5.12 |
8.57 |
0.25 |
| 60%S&P500/40%LG/C Bonds |
9.52 |
5.32 |
1.23 |
| Carr
Convertible Preferreds |
9.17 |
6.34 |
0.97 |
| S&P
500 |
12.82 |
8.61 |
1.14 |
| 90-Day
Treasuries |
2.99 |
0.97 |
0.00 |
| ---------------7
Years--------------- |
| Carr & Associates |
6.45 |
3.98 |
0.87 |
| Lehman Govt/Credit Bonds |
5.99 |
4.36 |
0.69 |
| Citigroup High Grade LT Bonds |
7.41 |
8.30 |
0.53 |
| 60%S&P500/40%LG/C Bonds |
4.66 |
7.62 |
0.22 |
| Carr
Convertible Preferreds |
8.10 |
7.92 |
0.65 |
| S&P
500 |
3.30 |
13.29 |
0.02 |
| 90-Day
Treasuries |
2.98 |
0.97 |
0.00 |
| --------------10
Years--------------- |
| Carr & Associates |
6.81 |
4.33 |
0.73 |
| Lehman Govt/Credit Bonds |
6.05 |
4.10 |
0.59 |
| Citigroup High Grade LT Bonds |
6.67 |
7.61 |
0.40 |
| 60%S&P500/40%LG/C Bonds |
6.29 |
8.63 |
0.31 |
| Carr Convertible
Preferreds |
7.81 |
8.77 |
0.47 |
| S&P
500 |
5.90 |
14.72 |
0.15 |
| 90-Day
Treasuries |
3.65 |
1.15 |
0.00 |
| --------------15
Years--------------- |
| Carr & Associates |
7.41 |
4.26 |
0.80 |
| Lehman Govt/Credit Bonds |
6.57 |
4.26 |
0.60 |
| Citigroup High Grade LT Bond |
7.35 |
7.42 |
0.45 |
| 60%S&P500/40%LG/C Bonds |
9.16 |
8.34 |
0.62 |
| Carr Convertible
Preferreds |
9.37 |
8.33 |
0.64 |
| S&P
500 |
10.46 |
13.58 |
0.48 |
| 90-Day
Treasuries |
4.00 |
1.23 |
0.00 |
Prepared: 3/14/08
