Strategic Tax Exempt Fixed Income Strategy

Strategy Objectives

Wasmer, Schroeder & Company, Inc.’s (WSC) Strategic Tax Exempt Fixed Income (STEFI) strategy seeks to maximize tax exempt income without duration or maturity restrictions. The investment style, while maintaining significant exposure to issues rated “AA” or higher, has a greater ability to utilize the credit curve than our intermediate strategy, and therefore exhibits higher performance volatility than our intermediate strategy.

The STEFI strategy holds issues with maturities ranging from 0 to 40 years, with exposure to multiple investment structures.  The strategy shifts exposure to different areas of the yield curve based on relative value, which results in varying exposure to different maturity buckets.  Typically, portfolios hold predominantly premium bonds, but discount coupons and zero coupon bonds are utilized based on prevailing market conditions. Average credit quality remains high but exposure to “A” and “BBB” rated bonds tends to be a significant portion of the portfolio. This strategy seeks to add value through yield curve shifts, structural analysis, credit research, and trading execution. Absolute interest rate shifts and duration are limited components of our alpha creation in this strategy. 

Composite Statistics

(As of 12/31/2011)

*Barclays Capital Municipal Bond Index
Note: Top Sectors breakdown for the Index is unavailable

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