TAX-FREE FIXED INCOME

 

Investment Objective

The portfolio’s objective is to provide clients withabove average interest income at low levels of risk, without federal income tax consequences.

Investment Philosophy and Approach

The Tax-Free Fixed Income Portfolio invests strictly in high quality municipal bonds rated A or better. The portfolio minimizes risk by selecting only high quality bonds and diversifying among issuers.  The number of bonds in an MPI Tax-Free Municipal Bond Portfolio ranges from 20-30 depending on account size. Position sizes are capped at 10% per issues and typically average between 3%-5%.   Maturities generally range from 0-10 years, the short to intermediate sector of the yield curve, with an average duration of approximately 3 years.  MPI believes this duration focus captures the majority of the yield curve without assuming above average market volatility. Bonds are typically held to maturity and an emphasis is placed on liquidity. No derivative or structured product is used and extension risk is carefully monitored at all times.