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Our Strategy Overview

Municipal Bonds In My IRA? Really?

Most investors buy municipal bonds because of their high credit profile and valuable tax-equivalent yields.  However, these bonds do not make sense in a tax-deferred account.

MBG has a strategy that uses taxable municipal bonds for these types of accounts.

As the name indicates, the income from taxable municipal bonds is subject to federal income tax.  Because of this, these bonds offer higher yields relative to traditional tax-exempt municipal bonds.  This feature makes taxable municipals ideal candidates for tax-deferred accounts because you receive a higher yield while avoiding federal income tax.

In fact, most taxable municipal bonds offer even higher yields than corporate bonds with the same credit rating and maturity.

Despite being a $600 billion market, the taxable municipal market is often underutilized and many investors do not even know it exists.  In fact, many of these bonds are not listed on major custodial platforms and therefore are unavailable to investors.  As a result, opportunities to uncover significant value exist for those who put in the time and resources to understand this market.

In addition, MBG critically looks at credit and structure to increase the portfolio’s yield.

We leverage both strategic broker relationships from around the country and our technological resources to navigate the taxable market and find “diamonds in the rough”.

Our Enhanced Taxable Municipal Bond Strategy has historically produced superior risk-adjusted returns over other investment-grade bond vehicles.  For investors looking for active fixed income management at a lower cost than most actively managed ETFs and Mutual Funds, our strategy is right for you.

Enhanced Opportunistic Taxable Strategy

Seeks to maximize risk-adjusted returns, while preserving capital. Takes an opportunistic approach, utilizing callable bonds and other features of portfolio structure to generate an additional return. The strategy allocates mostly to bonds that have call/maturity dates around the steepest part of the yield curve.

This strategy best suits a client with a sizable fixed income allocation and seeks to generate extra yield, knowing that incremental duration risk also comes into play. The client is comfortable with substantial optionality embedded in callable bonds and has no short-term liquidity needs.

KEY STRATEGY STATISTICS (as of 4/30/2020):


Years Out Coupon YTM YTW Duration Estimated Annual Income for $1,000,000 portfolio

Enhanced Opportunistic

6.32 5.62 4.14 2.62 4.56 $42,000
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