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For tax-sensitive, income-oriented clients, we manage bond portfolios designed to provide stable income while protecting principal. History suggests a broadly diversified portfolio of intermediate-term maturities is an optimal combination for municipal investors balancing risk and return. A client residing in the state of Colorado will benefit from income that is both state and federal tax-exempt.
Tributary Capital Management’s portfolio managers analyze the current interest rate environment, yield curve, and risk/return relationships throughout the Colorado municipal fixed-income market, but do not attempt to forecast the general direction of interest rates. Our fixed-income approach focuses on the total return of the portfolio. This strategy allows the team to construct fixed-income portfolios optimizing the relationship between yield curve changes and maturity. Continual monitoring of changing spread movements among fixed income assets provides opportunities for additional yield and decreased risk.
Consistent with our firm’s investment philosophy, our fixed-income managers believe that non-leveraged, intermediate term; Colorado municipal bond portfolios will maximize income exempt from both federal and state tax. Decreasing reinvestment risk and reinforcing our belief that the general direction of interest rates cannot be consistently forecasted, our manager’s purchase bonds with bullet maturities. Diversification in a state specific bond fund is accomplished through monitoring of the allocation to municipalities and awareness of revenue streams.
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