Core-Plus Bonds Portfolio
What is the Core-Plus Bonds Portfolio?
The Hemispheres Core-Plus Bonds Portfolio is a carefully structured bond investment strategy designed to offer both stability and the potential for superior returns. This strategy is built around two key components:
- Core Component of the portfolio consists of highly diversified securities like those found in the Bloomberg Aggregate Bond Index. The Bloomberg Aggregate, as of August 2026, was composed of over 14,000 securities.
Typical Range of Bloomberg Aggregate Index Holdings
| Asset Type | Allocation Range |
|---|---|
| U.S. Treasuries | 40 – 45% |
| Government Sponsored Entities (GSE) | 5 – 10% |
| Uniform Mortgage-Backed Securities | 25 – 30% |
| Corporates | 20 – 25% |
| Asset-Backed Securities (ABS) | 1.5 – 2% |
These proportions can fluctuate over time as the composition of bond issuances and market conditions change.
The core component of the portfolio provides a stable foundation of investment-grade bonds, ensuring a solid base of predictable income generation and risk management. As of July 2024, 72.58% of the Bloomberg Aggregate had an AA credit rating.
- The Plus Component of the portfolio represents strategic allocations of bonds that Hemispheres views as offering superior investment returns. While these bonds are primarily investment-grade and below-investment grade corporate bonds, from time to time we may include sovereign bonds, preferred securities, and/or convertible bonds. The flexibility of this component allows the portfolio to capitalize on attractive valuations, higher yield and emerging opportunities.
By blending these components, the Core-Plus Bonds Portfolio aims to deliver a balanced approach that combines the security of high credit quality bonds with the growth potential of strategically selected investments.
Why Choose Core-Plus Bonds for Your Investment Portfolio?
Diversification: The combination of core bonds and strategically selected plus bonds provides a well-rounded portfolio that spreads risk across various sectors and markets, all while maintaining an aggregate investment grade credit rating for the portfolio. The correlation between investment grade bonds to the S&P 500 is only 0.05. A correlation of less than 0.7 indicates that adding bonds to an equity portfolio helps to protect your portfolio from market volatility.
Potential for Higher Returns: The strategic allocation in the “Plus” component allows the portfolio to pursue superior returns by investing in discounted bonds that are poised for capital appreciation as credit quality improves and as the bond nears maturity.
Stability and Growth: While the core bonds offer stability and reliable income, the plus bonds add an income and growth element, making this strategy suitable for a wide range of investment goals.
Take the Next Step with Hemispheres
Your investment strategy should be as unique as your financial goals. The Hemispheres Core-Plus Bonds Portfolio offers a robust, diversified approach to bond investing.
Michael Hart, CFA
CEO and Director of International Research
Michael Hart has over 30 years of capital market experience, previously serving as Managing Director at Tradewinds Global Investors.
Rebecca Holden, CFA
Director of Domestic Research
Rebecca Holden has over 30 years of capital market experience, previously serving as Portfolio Manager and Principal at Archer Capital Management.