What is the size of the market?
It has grown phenomenally in recent years — about $75 billion in taxable municipals has been issued in the past five years. Along with increased investor interest have come an increase in liquidity and a tightening of spreads. Q: How do you run this portfolio? A: From an overall strategic view, we manage for total return. We’re not only looking at the juiciest yields, we place a premium on high credit quality and liquidity. We also look at the shape of the yield curve to find the best values. Q: Is your fund the only open-ended taxable municipal-bond fund? A: As far as we know, we are the only one. We’re typically classified as a corporate-bond fund because the interest income from taxable municipal bonds is taxable on a federal level. However, there are certain states that exempt some of their taxable municipal bonds from state income tax. With all other things being equal, a municipal bond with a state tax-exemption will have a slightly higher price and lower yield than a municipal
