Intermediate Tax Exempt Fixed Income Strategy

Strategy Objectives 

Wasmer, Schroeder & Company, Inc. (WSC) believes that inefficiencies in the municipal bond market can be exploited over time through the use of active portfolio management. The management techniques and internal credit evaluation utilized in the Intermediate Tax Exempt Fixed Income (ITTE) strategy have produced attractive risk-adjusted returns. WSC portfolios are managed primarily for maximum income and capital preservation. Growth of principal is a secondary consideration.

The ITTE strategy is structured using a core ladder approach, with 2/3 of the portfolio positioned in an intermediate-term ladder designed to minimize volatility during periods of fluctuating interest rates. Incremental return is achieved through adjustments to the ladder and by allocating the remaining 1/3 of the portfolio to areas of the tax exempt yield curve which we believe offer the potential for increased risk-adjusted returns. This duration-neutral portfolio structure seeks to exploit variables such as the relative shape of the yield curve and seasonal shifts in the market’s supply/demand dynamic in order to maximize income while minimizing volatility in the portfolio. The ITTE strategy places a strong emphasis on diversified risk while limiting the credit and maturity structure of the portfolio.  The primary benchmark is the Barclays Capital 1-15 Year Municipal Bond Index and the secondary benchmark is the Barclays Capital 5-Year Municipal Bond Index.

Composite Statistics 

(As of 12/31/2011)

 *Barclays Capital 1- 15 Year Municipal Bond Index

Note: Top Sectors breakdown for the Index is unavailable

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