Tax-Exempt Bond Strategy
MCM’s fixed income investment strategies pursue the belief that fixed income portfolios represent the foundational portion of an overall investment allocation, acting as the ballast to the risker allocations. Therefore, it is our practice to avoid the riskier, or less liquid corners of the fixed income market in search of every last bit of yield. Rather, we employ a time-tested, diligent investment process to build high quality, fixed income portfolios that are suitable for a given market environment.
MCM’s Tax-Exempt Bond strategy seeks to deliver total returns, on a risk-adjusted basis, that exceed the Bloomberg Municipal Bond 1-10 Yr Blend Index.
MCM’s Tax-Exempt bond strategies employ three stages in constructing portfolios made up of securities, including exchange-traded funds, whose income will be exempt from income taxes. We start with a top-down viewpoint, evaluating the current economic environment, monetary and fiscal policies, and secular trends to identify the pressure on monetary authorities towards future interest rate moves. These factors inform the Fixed Income Investment Committee in determining how portfolio duration will be established, which can range from 1.5 – 6.0 years. We then utilize our proprietary credit analysis model to determine which candidates we would consider applying to the portfolio construction, favoring those we believe to be in an improving credit position and avoiding those moving in the opposite direction. Then we determine valuation and trading strategies, the final and most impactful step in the process on the strategy returns.
Ken Green, CFA – PM, Principal with Mitchell Capital since 1991, analyzing fixed income since 1986
Christen Dusselier – PM, Principal with Mitchell Capital since 2001, analyzing fixed income since 2001
Phil Kernen, CFA – PM, Principal with Mitchell Capital since 2005, analyzing fixed income since 1992
What sets this strategy apart?
Long-term management team with ownership in the firm
Close working relationship with MCM’s equity team to ensure the Fixed Income strategies benefit from equity research and expertise
Flexibility allowing for responsiveness to changes in economic environment
Bond Strategies: March 31, 2023
|Characteristic||Tax- Exempt Bond|
|Yield to maturity||3.04%|
|Sector||Tax-Exempt Bond %|
|U.S. Treasury Notes||41.3|
|U.S. Agency Notes||0.0|
The information above is intended solely to provide insight into how the manager analyzes securities, and are not a recommendation for any particular security or strategy. There is no assurance securities will remain in the portfolio or will be profitable. This is a list based on a percent of total and is not a full list of securities.
|Moody/S&P||Tax-Exempt Bond %|
|Tax-Exempt Bond %|
|‹ 1 year||51.2|
|1 – 3 year||37.4|
|3 – 5 year||8.1|
|5 – 7 year||2.7|
|7 – 10 year||0.5|
|› 10 year||0.1|
About Mitchell Capital Management
Mitchell Capital Management (MCM) was founded in 1987 and is an SEC Registered Investment Advisor. The firm manages portfolios and provides investment solutions for an array of investors nationwide, including individuals, foundations, union pension plans, retirement plans, endowments and associations. MCM has always been employee owned and intends to stay that way. Our fiduciary culture means our clients are the first priority in each decision we make.