Cypress objective for fixed income investment is to provide safety of principal with a positive rate of return in excess of inflation. As a result we are primarily intermediate term maturity investors who seek the sweet spot in the yield curve. In the current environment, we would be weighted toward the short end of the yield curve. We generally invest in high quality corporate credits, treasuries and agencies but will buy select lower quality corporate credit when we have extensive knowledge of the company as a result of our equity research.

We have a long term, buy and hold approach but will position the more liquid treasury component (weighting and maturity) according to our anticipation of shifts in the yield curve. Our inflation outlook and anticipation of Fed policy plays an important role in the average maturity of the portfolio, in general, and the maturity of our Treasury portfolio, in particular. Typically, no individual corporate credit represents more than 5% of the portfolio.