From Ford to the World Bank: Freedom has assembled a balanced bond portfolio

Freedom analysts have put together a balanced model portfolio of 20 issues of USD-denominated bonds. Investment-grade securities account for 70% of the allocation, while issues below investment grade account for 30%. The portfolio combines corporate bonds, sovereign debt, and securities of international development banks. A quarter of the allocation is in floating-rate instruments. 

How the investments are allocated

Freedom analysts released a balanced model portfolio of 20 issues of USD-denominated bonds from companies, sovereigns, and international development banks. Investment-grade securities account for 70% of the allocation, while issues with higher credit risk account for 30%. The investment-grade portion consists of issues rated from BBB− to AAA. These include bonds from Citigroup (C), Deutsche Bank (DB), AT&T (T), and Nasdaq (NDAQ). Such a rating reflects a relatively high assessment of the borrower’s ability to meet its obligations.

They allocated 5% each to securities of the Asian Development Bank and the IBRD, which is part of the World Bank Group. Both issues are rated AAA and mature in 2035. Another 5% each is allocated to U.S. Treasuries and Abu Dhabi government bonds. Issues maturing in 2028–2031 account for 60% of the portfolio, those maturing in 2032–2033 for 10%, and from 2034 onward for 30%. The largest sector segment is banks, with a 20% share.

Differences between the portfolios

The conservative portfolio from Freedom consists of 20 issues of investment-grade corporate USD bonds with fixed coupons and maturities in 2027–2030. Borrowers include Citigroup, Marriott, McDonald’s, Starbucks, and other large companies.

The balanced portfolio also includes 20 issues, but combines corporate bonds, U.S. and Abu Dhabi sovereign debt, and securities of international development banks. Investment grade accounts for 70% of the allocation, while issues below that account for 30%. Maturities span 2028–2036.

Three companies from the portfolio

In the balanced portfolio, some of the highest coupons are offered by bonds from Ford, Ithaca Energy, and LATAM Airlines. All three issues are below investment grade, so the higher payments are accompanied by higher credit risk.

Ford Motor (F) manufactures passenger and commercial vehicles and develops electric vehicles, auto lending, and leasing. In the first half of 2026, ICE vehicles and hybrids generated 55% of revenue, and Ford Pro’s commercial business generated 36%. The selected issue has a 9.625% coupon, a BB+ rating, and matures in April 2030.

LATAM Airlines Group (LTM) is Latin America’s largest airline group. In Q2, revenue rose 27.2% to $4.12 bn, and net profit totaled $118 mn. Net debt to EBITDA over the last 12 months is 1.4. The issue’s coupon is 7.875%, the rating is BB+, and maturity is April 2030.

Ithaca Energy produces oil and gas in the North Sea. For the first half-year, EBITDA reached $1.12 bn, and operating cash flow was about $955 mn. Experts highlight the risks of a high tax burden and a large capex program. The issue’s coupon is 8.125%, the rating is B+, and maturity is October 2029.

How risk was assessed

The portfolio’s annual VaR is 4.8% at a 95% confidence level, and CVaR is 6.5%. The first metric sets a loss threshold that the model allows to be exceeded in 5% of scenarios; the second is the average loss beyond that threshold. This is not the limit of possible losses. Coupons are also not equal to yield to maturity, which depends on the purchase price.

This is not an individual investment recommendation.