The investment objective of AMI’s tax-exempt fixed income product is to provide an investment vehicle for taxable individuals and corporations which will achieve superior after-tax returns compared to traditional investment grade portfolios having an intermediate maturity focus. This product is suitable for investors looking for high after-tax income relative to other high quality debt securities, and who desire portfolio diversification, especially with respect to other income producing investments.
- We utilize a top down approach to determine the appropriate portfolio structure within the current economic cycle (ladder versus barbell, short versus intermediate, callable versus bullet). We then use a bottom up process to select the appropriate securities for each portfolio.
- We attempt to identify high quality, tax-exempt bonds of municipal issuers with favorable credit characteristics and the potential for rating upgrades and/or underlying financial improvements which are not fully reflected in current market prices.
- We closely examine the pledge backing each bond, the issuer’s debt load, tax-rates, tax-base, demographics, and the rationale of each issue along with the use of proceeds.
- We prefer issues that are essential services and which have a secondary source of revenue that provides additional downside protection to bondholders. Examples would include toll bridges, water and power, sanitation and special tax issues.
- Every portfolio is customized to meet the specific needs of each individual investor. Considerations include such factors as current asset allocation, state of residency, investment time horizon, cash flow needs, and anticipated marginal tax bracket.
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|TOP TEN HOLDINGS*|
Folsom CA Redevelopment AGY Successor
4.000% Due 08-01-30
Southeast Recover CA Leave Rev
5.250% Due 12-01-18
Natomas Unified School District CA
5.000% Due 11-01-31
El Dorado CA IRR Dist CTFS Partn Ref
5.750% Due 03-01-24
California St For Previous ISS
5.000% Due 08-01-27
ABAG Financial Authority Nonprofit Co
5.000% Due 9-02-29
Sacramento CA Fing Auth
4.000% Due 09-01-22
Madera California IRR District WTR Rev
5.000% Due 01-01-23
Kern California Cmnty College District
5.250% Due 11-01-31
Palm Desert CA Fing Auth
5.000% Due 10-01-22
*As of 9-30-17. Holdings are subject to change. The securities identified and described above do not represent all of the securities purchased, sold or recommended for client accounts. The reader should not assume that an investment in the securities identified was or will be profitable. A complete list of all buy and sell recommendations for this strategy within the last 12 months is available upon request. AMI Asset and/or one or more of its employee may have a position in these securities and may purchase and sell such securities from time to time.
* as of 09/30/2018