Hamlin"The most powerful force in the universe is compound interest"
-Albert Einstein
Performance Summary
Hamlin's pursuit for superior performance balances the risks taken relative to their potential rewards. We believe that compounding income at high rates is the most potent force of consistent risk-adjusted growth available in the financial markets. Our disciplined investment strategy not only allows clients' portfolios to enjoy long-term growth but also provides them with ample cash flow to be accessed if necessary. Two asset classes that best allow us to implement this strategy are yield-oriented equities and high-yield bonds, both tax-exempt and taxable.
Equity Management
Our equity strategy is an old fashioned long-term investment approach hence performance is not driven by trading, arbitrage, or derivative enhancement. Hamlin invests in companies that we believe to be undervalued and companies that offer generous dividends with the potential to grow their dividend. We also seek out those companies that are not widely followed by Wall Street securities analysts. In this niche, we have been able to identify opportunities that offer significant and consistent growth potential through capital appreciation and high and/or rising cash returns, the latter of which helps to minimize downside risk.
Hamlin conducts original company research. We derive our investment ideas by focusing on company financial fundamentals, quality of management, and quality of cash flows. The Hamlin research team performs original research on companies and engages industry consultants to report on the investment merits of specific industry sectors and companies. It is this research intensive process that has driven our historical returns.
Fixed Income Management
Hamlin specializes in the management of non-rated, primarily tax-exempt high-yield fixed income securities. The objective in investing in high-yield bonds is to allow client portfolios to compound higher rates of interest. Even better, tax-exempt bonds allow interest to compound free of federal income tax. We buy non-rated bonds because they typically pay a higher rate of interest than rated bonds to compensate investors for risk. An additional feature is the potential for capital to appreciate. In Hamlin's view, the term “non-rated” does not necessarily imply that a bond is not credit-worthy.
Hamlin's performance track record reflects original credit analysis and risk mitigation of individual projects behind the bonds as opposed to predicting interest rates. Similar to our equity management, the research team also conducts research and extensive legal due diligence prior to purchasing bonds. Unlike traditional 'junk' bonds, the best high-yield tax-exempt bonds have first mortgages on property, plant, and equipment, pledges of gross revenue, restrictive covenants, and many other security provisions.
For our taxable high net worth clients, we invest in high-yield tax-exempt bonds or high-yield taxable bonds that pay a comparable tax-adjusted rate. For our tax-exempt clients we manage high-yield taxable bonds. Hamlin's fixed income historical performance has shown fixed income cash flow stability with equity like total returns.
Please refer to the important disclosures found on Hamlin's disclaimer page with regard to the risks inherent in Hamlin's investment strategy.