Municipal Bond SMA’s – Client-Driven Portfolios
We understand why advisors use mutual funds and ETF’s for municipal bond exposure. Lack of time or a focus on passive investing style are the most likely reasons. Advisors recognize the clear-cut advantages of individual municipal bonds and some recognize they should be using them. We may be the solution you need. We handle all aspects of portfolio management at your custodian for around the cost of an ETF. Our SMA portfolios are fully-customized to meet your clients’ state tax exemption and risk/return targets and can be branded for your firm.
Below we compare a municipal bond portfolio structure we prefer to popular mutual funds and ETFs. Individual bonds can provide key advantages in yield, income, and tax-customization with less duration. Our team of traders and PM’s identify compelling values and target them. A final note, we find value in some municipal bonds that funds and ETF’s cannot buy due to mandate restrictions.
With this potential improvement in yield, income and ability to customize for only 0.30%, we calculated the advantage of earning 1/2 percent of additional yield below
Municipal bonds are a compelling relative value and a secure harbor from equity volatility. Learn more, contact us, sign up for our research, or send us a request to review your current municipal investments.
Let us manage municipal bond portfolios that match your clients’ needs. We believe you could provide them with a material improvement in yield, income, tax-optimization, and risk levels. We make it easy to provide your clients individual municipal bonds.
1. Sample municipal bonds exhibiting relative value priced with Bloomberg BVAL 9/25/18. Equal weight par value: 117023BB6; 3431363Y1; 414009GP9; 41401PBX0; 438689JG7; 442435K36; 46256QDJ2; 46613CN43; 546415L40; 51856CAR2; 507207DZ8; 546589UJ9; 591745M50; 65821DFT3; 682001CA8; 691879FS4; 76222RMU3; 837542EX3; 821697G31; 821532MJ4; 833085G31; 833085T45; 880064N30; 93974C6U9; 952718UV4. 2. Equal blend VWITX, MDNLX, and PMNIX as of 9/24/18. 3. Equal blend ITM, MUB, and VTEB as of 9/24/18. *Compounded annually for 15 years at 3.50%, 3.00%, 2.50%, and 2.00%. Investment results not guaranteed and may vary based on the market, your investment parameters and other factors. Past performance is not indicative of future results. For illustrative purposes only. Moors & Cabot, Inc. Member FINRA, NYSE, SIPC. Member of SIPC, which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). Explanatory brochure available upon request or at www.sipc.org. Municipal Bonds are issued by state and local governments and their agencies. They include general obligation debts backed by the full faith and credit of the issuer, as well as revenue bonds guaranteed by a particular stream of revenue. Municipal bonds can be either tax exempt or taxable under current law. Please consult a tax professional for more information. One Federal Street, 19th Floor, Boston MA 02210