It is important that investors make strategic, tax-conscious decisions about their portfolios’ investments, particularly if the majority of assets are in taxable accounts. CLS’s Tax-Aware Bond strategy seeks to help investors maximize the post-tax total return of their portfolios.
The strategy invests in traditional municipal bond fixed income assets, including those that are short duration, long duration, and state-specific.
Explore the Benefits of Using Municipal Bonds within a Portfolio
Municipal bonds are issued by a U.S. state, municipality, or county to finance its capital expenditures.
Municipal bonds are appealing because they often represent investments in state and local government projects that have an impact on daily life, including construction or improvement of schools, highways, hospitals, housing, and other important public projects. Potential issuers include: cities, counties, redevelopment agencies, special-purpose districts, school districts, public utility districts, publicly-owned airports and seaports, and any other governmental entity below the state level. Municipal bonds may be general obligations of the issuer or secured by specified revenues.
Municipal bonds help mitigate potentially negative tax consequences since the interest income that bondholders earn is often exempt from both federal income tax and the income tax of the state in which they are issued. Also, unlike new issue securities that are brought to market with price restrictions until the deal is sold, municipal bonds are free to trade at any time once the investor purchases them.