Tax Exempt Bonds

People

James Bernard, CFA

Portfolio Manager

Jim Raimondo

Portfolio Manager

Jeremy Scacco

Portfolio Manager

Key Stats

Inception July 31, 2005
Benchmark Bank of America Merrill Lynch US Municipals 1-10 Yr
Account Min. $2M
Custodial Arrangements Available upon request

Philosophy

The Ancora Tax Exempt Fixed Income Strategy makes use of Ancora’s extensive municipal credit knowledge at the state, county and local level to construct nationwide and state specific municipal bond portfolios for institutional clients. With almost universal access to investment research and bond analytics, it is not the availability of municipal research but rather how it is utilized and consistently applied that achieves successful long term tax exempt fixed income results. To that end, several aspects of our approach to municipal bond portfolio management stand out:

  • Intermediate Target: Over time, we believe the intermediate portion of the yield curve (3-10 years) outperforms on a risk adjusted basis with less price and income volatility.
  • Core Positions: To ensure proper diversification we construct a foundationally sound and diverse bond portfolio.
  • Secondary Positions: While liquidity and marketability are desirable characteristics in a municipal bond portfolio, opportunities often exist to add value in less actively traded issues and structures for a small segment of the tax free portfolio.
  • Price Discovery: While bond market transparency has improved, we believe there is still a significant opportunity to add value through a rigorous price discovery process particularly in smaller issues and more complicated bond structures. With over $1 billion in discretionary and non discretionary fixed income advisory assets we are large enough to “shop” our transactions across a wide variety of market makers for the best possible price.

These strategy differentiators combined with our extensive credit and sector background and our willingness to be very hands on when it comes to client service make Ancora’s Municipal Bond Strategy the right choice for a wide variety of institutions, RIAs and consultants.

Process

  • Portfolio Construction: Typically 20-50 holdings per account focusing in on credit/duration/sector allocation decisions. The investment universe is high quality, investment grade municipal bonds.
  • Buy Discipline: We focus on investment grade bonds and buy when price has dislocated from fundamentals relative to historical spreads.
  • Sell Discipline: We scale out of positions when price becomes stretched relative to historical spreads and when underlying credit fundamentals begin to deteriorate.
  • Risk Management: We maintain rigorous credit standards for the portfolio with a quality first attitude focusing exclusively on underlying ratings as opposed to issuer insurance enhancements. Individual position sizes are also limited to ensure proper diversification. In addition, duration bets are confined to no more than 20% variance with the duration of the target index.  

Performance

> View Factsheet

To learn more, contact an Ancora advisor today >