HIGH-QUALITY MUNICIPAL BOND STRATEGIES

Our High-Quality Municipal Bond solution is managed through Asset Preservation Advisors

Asset Preservation Advisors believes that there are pricing inefficiencies in the municipal bond market. Seeking to capitalize on these and add value through active portfolio management, they work to protect capital and enhance yields by investing in high-quality investment grade municipal securities, primarily in the secondary market.

Buying and selling of municipal bonds should be strategic due to the nuances of this non-transparent, over-the-counter market where price mark ups and factors such as large supply and demand imbalances can dramatically influence overall bond prices. APA’s municipal investment experience combined with extensive broker/dealer relationships help in the execution of the investment philosophy and client mission.

APA does not utilize passive account management, but will vary portfolio structure due to changing market conditions. This approach can help to reduce volatility while creating the most favorable risk/return profile for clients.

Three APA strategies are available via Skypoint’s platform

1. HIGH QUALITY INTERMEDIATE TAX EXEMPT STRATEGY

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1. HIGH-QUALITY INTERMEDIATE TAX-EXEMPT STRATEGY

Objective:

To manage for after-tax total return, the strategy seeks to add value through active management and access to institutional pricing. Conduct thorough relative-value and credit analysis to take advantage of inefficiencies in the market. Maximize after-tax income. Bonds selected for the accounts have maturities within 1 and 20 years.

APA Municipal Bond Team:

Portfolio managers, Kevin Woods and Trisha Broussard, direct the strategy’s active management and draw upon the expertise of our municipal traders and credit analysts. Together, the team identifies issuers, evaluates credit fundamentals and implements a relative-value trading approach.

Investment Process:

The strategy employs a quantitative approach to investing in primarily high-quality municipal bonds. We combine our fundamental research with an investment process that emphasizes both risk management and relative-value investing to achieve competitive risk-adjusted returns.

2. SHORT-TERM TAX-EXEMPT STRATEGY

Objective:
This strategy seeks to provide current income, exempt from federal income taxes, while providing liquidity and preserving capital.

Strategy:
APA’s primary focus is to produce attractive tax-free yields through active management of well-diversified municipal portfolios with an average duration of 0-2 years.

APA Municipal Bond Team:
APA’s investment professionals utilize a top-down and bottom-up approach in order to add value through our active management program. Nine of APA’s Investment Professionals, including the credit research team, portfolio managers and analysts focused on this strategy.

Investor Benefits:

  • Customize portfolios to meet our clients’ specific tax objectives, income requirements and risk tolerance.
  • Identify relative value and utilize credit analysis to take advantage of pricing inefficiencies in the market.
  • Provide ongoing internal analysis of credit quality and underlying fundamentals.
  • Active management which can potentially provide additional total return over the lifetime of the portfolio.
3. ENHANCED INTERMEDIATE TAX-EXEMPT STRATEGY

Objective:
APA seeks to provide a high level of income exempt from federal income tax by investing primarily in lower-rated municipal bonds. The Strategy seeks to exploit investment opportunities in the high-yield market, primarily through diversified exposure to high-yield municipal bonds. Investment opportunities that maximize total return are sought through a well-defined investment process that has been in place for over 25 years.

Strategy:
APA’s primary focus is to purchase attractively priced, quality, high-yield municipal bonds. At the same time, we seek to manage the risk of lower-rated securities through careful and in-depth credit analysis.

APA Municipal Bond Team:
Veteran Portfolio Manager, Ken Woods, and Portfolio Manager, Kyle Gerberding, direct the Strategy’s active management and draw upon the expertise of our municipal traders and credit analysts. Nine investment professionals, including a credit research team, portfolio managers and analysts focused on this strategy. Together, the team identifies issuers, evaluates credit fundamentals and implements a relative-value trading approach.

Investor Benefits:

  • Of APA’s strategies, it provides the highest potential for tax-exempt current income and capital appreciation.
  • Lower default risk than corporate high income.

Learn more about Asset Preservation Advisors