Municipal Strategy

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Municipal Strategy
Taxable Strategy

Haverford’s municipal fixed income strategy is designed to enhance after-tax returns while preserving capital and income. As the municipal bond market is comprised of individual local markets, not one homogeneous market, every state brings unique considerations to the portfolio composition and security selection.

These considerations include but are not limited to:

  1. Credit quality of the state’s general obligation debt.
  2. Available supply of bonds in both secondary and new issue markets.
  3. State and local tax implications.

Investment Philosophy

  • Identify municipal securities evidencing strong credit fundamentals, structural characteristics supportive of bondholder protection, and appropriate risk/reward valuation.

  • Emphasize intermediate maturity holdings and de-emphasize market timing in an effort to control risk.

Investment Strategy

The selection of individual bonds is determined by analysis of multiple factors such as:

  • Credit strength of the issuer

  • Strength of the bondholder’s claim on the revenues.

  • Call and other redemption provisions

  • Yield curve analysis of the increased benefit, if any, for maturity extension

Portfolio Characteristics*

Characteristic

Haverford

Bloomberg
Yield to Worst 2.9% 2.9%
Coupon 3.3% 4.6%
Current Yield 3.3% 4.4%
Quality AA AA
Maturity 5.3 6.2
Effective Duration 2.9 4.0

Effective Duration Allocation*

Characteristic

Haverford

Bloomberg
0-1 Years 22.7 8.3
1-3 Years 37.1 32.1
3-4 Years 12.2 14.4
4-6 Years 17.4 24.8
6-8 Years 9.5 17.7
Over 8 Years 1.1 2.7

Quality Distribution*

Haverford

Bloomberg Muni

Notes

“Bloomberg” refers to the Bloomberg 1-10 Year Municipal Index. The Bloomberg 1-10 Year Municipal Bond Index is illustrated for comparative purposes only. It is a rules-based, market-value-weighted index engineered for the long-term tax- exempt bond market. This index is the 1-10 Year component of the Municipal Bond index. It is not possible to invest directly in an index.

*Based on recommended portfolio weights. Portfolio Characteristics, Sector Allocation and Quality Distribution are subject to change at any time based on market or other conditions.

Disclosure

All Data as of September 30, 2024. The information presented should not be construed as investment advice or recommendations with respect to specific securities presented and may not represent the holdings or weighting of any particular portfolio.