The interest income generated by bonds is an important source of liquidity for investors that have an ongoing need for cash flow. The relative stability offered by short duration, high quality bonds is also supportive of liquidity needs, particularly when financial markets are experiencing elevated stress. We allocate capital to bonds when the investor has a need for steady income, requires a defined amount of liquidity, and/or desires a sleeve of relative stability for the overall portfolio. We employ an active strategy that manages the duration (interest rate) risk and credit risk of a bond portfolio in the pursuit of superior risk adjusted total return. The portfolio is diversified among 20-25 individual security positions that may be selected from a variety of issuing entities. Where appropriate, the strategy utilizes state specific municipal bonds for generating superior after-tax returns.