Investment Philosophy

OVERVIEW

The Stonebridge investment philosophy is rooted in our commitment to our clients. We add value through comprehensive analysis of financial markets and individual investment opportunities. In addition to fundamental analysis, we draw upon our experience and understanding of our respective asset classes to take advantage of market inefficiencies using an active management approach. Adhering to our conservative and disciplined principles has resulted in consistent and superior investment returns for our clients.

Stonebridge believes that investors must diversify their holdings in order to maintain an appropriate level of risk through all market cycles. The specialized income-producing investments Stonebridge manages can be a key component to a well-diversified portfolio.

PREFERRED SECURITIES

Our fundamental investment philosophy in managing tax-advantaged and taxable preferred securities is to obtain an attractive total return while preserving capital. Stonebridge purchases diversified portfolios of high-quality preferred securities and manages duration through active portfolio management and/or by employing a cross hedge (depending on mandates in a client's investment guidelines).

Our approach dictates that there should be very little portfolio turnover other than taking advantage of market inefficiencies or duration adjustments. Our goal is to provide a higher return than would be achieved in other fixed-income investments.

NORTH AMERICAN EQUITY INCOME SECURITIES

The Stonebridge equity income investment philosophy is one that seeks to maximize total return through long-term capital appreciation and growth in dividends and unitholder distributions. Our investment team follows a conservative investment approach that is rooted in fundamental analysis and valuation discipline.

Given that most of our clients require relatively stable and recurring income from their investment portfolios, we seek equity securities with underlying businesses that possess a history of producing stable cash flows and attractive returns on invested capital. These businesses must have a predictable capital expenditure cycle and a well established competitive position.

We seek out experienced and honest management teams whose interests are aligned with those of their investors. We look for conservatively capitalized balance sheets. Lastly, we are value-conscious and seek to acquire these businesses, over time, at attractive prices.

SHORT-TERM MANAGEMENT

Our fundamental investment philosophy in managing short-term investments is to maximize total return while preserving our client's capital. Our investment team employs a conservative investment strategy that is based on technical analysis of various asset classes within the short-term market. Understanding our client's risk profile, liquidity constraints and tax status are paramount to constructing a portfolio that meets a client's investment guidelines.

By employing relative value analysis and drawing upon our strong dealer relationships, Stonebridge can utilize its market expertise to construct a portfolio designed to significantly improve short-term cash returns relative to a passive cash management approach.