We focus on the client’s individual objectives

Our Tax-Advantaged Fixed Income strategy is reflective of the customized, individual approach we take across each of our fixed income strategies.

A customized approach is required when attempting to derive tax advantages from fixed income investing. Our management team is well-aware of the importance of keeping focused on the client’s individual objectives when structuring and managing a bond portfolio – a portfolio which must complement other assets in the allocation mix and coordinate with the client’s tax planning.

Our objective is to blend the most efficient combination of fixed income assets together in order to maximize after-tax income consistent with the client’s income requirements, all the while ensuring coordination with their risk and volatility guidelines.

Measuring Success

Unlike the other Fixed Income Strategies offered by us, the Tax-Advantaged strategy does not measure itself against any of the standard industry benchmarks. We believe providing any composite representatives of historical tax-advantaged performance can be misleading.

Normally, clients will ask us to develop a fixed income solution for delivering optimal after-tax income, with either risk management/diversification or current income as the primary goal. While it is true that we do follow the same quantitative approach and process that is well defined in our other strategies, the unusual tax-related consequences must be applied to each separate portfolio.

As such, it is each client’s individual combination of tax variables that dictate the portfolio’s overall structure. These variables include state income tax rates, annual net realized gain/loss positions, and exposure to the Alternative Minimum Tax (AMT).

In addition, the different nature of each client’s asset base and risk/volatility tolerance must be carefully evaluated when establishing an appropriate portfolio structure. Such factors require our investment team to customize each portfolio.

As a result, we are unconvinced that traditional total rate of return performance standards properly adjust for these multiple circumstances. Nor do they provide a routine application for client to client comparison.

We thus do not use any single performance benchmark. Rather, we structure a customized portfolio to fit the client’s objective, usually the maximization of after-tax income consistent with a level of risk and volatility as defined by the client.

In addition to our Tax-Advantaged Fixed Income product, we also offer the following strategies: