CMA’S SELECT HIGH INCOME BOND PORTFOLIO ACCOUNT
The US stock market has been quite volatile for the past several years and CDs & Money Market accounts are now only paying 2-3%. Many savers and investors may be seeking an alternative to higher risk stock market investing and low CD rates. The CMA Select High Income Bond Portfolio Account is now offered to provide high current income for savings, income, or as an alternative to “growth stock investing”.
WHAT IS THE SELECT HIGH INCOME BOND PORTFOLIO ACCOUNT?
This investment Portfolio is designed for "long term investors" seeking high current income over a long period of time such as retirement, or for long term savings time frames for building wealth. The Portfolio is structured to hold only exchange-traded corporate bonds of major companies across many industries. Bond prices will fluctuate day to day in the market place.
Portfolio assets will be invested in corporate bonds, which are senior to the common shares of the issuing company. Security selection criteria may change from time to time based on market conditions and availability of high income securities.
Corporate bond issuers guarantee repayment of principal at the originally issued Par Values at maturity and guarantee to pay the regular semi-annual coupon interest payments when due for the life of the bond.
WHICH ISSUERS MAKE UP THE SECURITIES OF THE PORTFOLIO?
Current issuers of the corporate debt securities in the Portfolio include: CBS Corp, Duke Power, Goodrich Corp, JC Penney, News Corp, RR Donnelley, Valero Energy, plus many others. All issuers of Portfolio securities have been in business as a public company, for at least 5 years and others for many decades. Securities selections are diversified across 20 different industries. CMA offers multiple options to choose a portfolio of a minimum of 12 bond issuers to portfolios of up to 50 bond issuers. CMA has the discretion to increase or decrease the number of bond issuer holdings, if desirable, in the best interests of the Client or investment strategy.
WHAT ARE THE EXPENSE COSTS, MINIMUM SIZE AND MANAGEMENT STYLE?
The CMA Select High Income Bond Portfolio Account is offered in a $25,000 minimum account size. CMA charges a .75% annual Investment Advisory Management Fee for managing this Portfolio account. Clients can direct our custodian, GreatBanc Trust Company, to make regular monthly, quarterly or annual distributions of Portfolio income to their checking accounts at their bank via ACH no-cost transfer deposits or receive checks in the mail. GBTC charges a minor custody fee for accounting, trade processing and statement preparation & distribution. If income is not distributed to the client, it will be reinvested within the Portfolio. The Portfolio will be actively managed by CMA, where changes in holdings would be made at times at the discretion of CMA to maintain quality of issuers, high interest yields, and to replace any called or matured securities.
HOW IS THE PORTFOLIO ACCOUNT ESTABLISHED?
New clients would set up a new account by executing an Investment Advisory Agreement with CMA and new custody account documents with our custodian GreatBanc Trust Company. The client would then fund the new account with cash, and CMA will then buy all the required portfolio securities. Clients would then receive monthly or quarterly account statements from the custodian in paper format or electronically, at the client’s selection. All security holdings are held in custody at The SEI Trust Company, a public company under the Ticker symbol: SEIC.
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