What is the investment philosophy and approach underpinning the municipal bond component of the portfolio?
The allocation to municipal bonds means that a significant portion of the strategy’s income is exempt from federal and, in some cases, state taxes. In addition, the municipal allocation is actively managed in order to target attractive returns. Munis typically offer high credit quality, attractive after-tax yields and historically low volatility relative to many other fixed income sectors. We manage muni investments with a goal of minimizing capital gain realization rates and taxable current income levels; we diversify across all major sectors of the muni market and apply sector rotation, yield curve positioning and duration management. Q: What do you mean when you say the strategy isn’t tethered to a traditional bond index benchmark? A: By design, the strategy is not managed relative to a specified market index benchmark, an important difference between the Unconstrained Tax Managed Bond Strategy and traditional tax-efficient or municipal fixed income strategies. The broad investment
