The following points highlight our investment process:
- Portfolios are conservatively constructed with moderate durations to limit systematic risk.
- Minimal interest rate forecasting is employed.
- Only high quality, highly liquid securities are purchased.
- Portfolios are constructed using four proven strategies.
- Active management is employed to enhance investment returns.
- Tax efficiency is paramount in all investment decisions.
The municipal bond market is extremely broad and decentralized. Bonds are issued by many large municipalities, such as states, counties and cities as well by smaller municipalities and various municipal authorities that operate water and electric systems, provide low cost mortgage assistance, oversee student loan programs, support higher education, etc. Fundamental credit analysis and specific security knowledge are critical elements in our research effort that drives effective purchase and sell decisions. Rating agency ratings and analysis are closely monitored and provide initial credit screens. In depth internal credit analysis is conducted before specific credits are approved for potential inclusion in client portfolios.
In addition to credit approval, bond indentures and individual security structures are thoroughly analyzed as we seek to discover undervalued securities likely to outperform the market. Internal analysis performed by C.W. Henderson and Associates is further complemented by research received from over fifty broker dealers, many of whom have specialized expertise regarding political and economic factors impacting regional issuers, post employment employee benefit funding, etc. The Firm continuously monitors portfolio constructions to assure that account positioning reflects the Firm’s interest rate outlook. Returns are measured relative to the Barclays Capital Five Year GO Municipal Index.