With a focus on limiting price volatility, the Stability strategy has historically generated more stable returns relative to the broad municipal market during periods of volatility. To date, the strategy has never reported negative returns over any 12-month rolling period.* In pursuit of a stable return profile, portfolio managers leverage both quantitative analysis and our proprietary technology to identify what we consider the ideal mix of securities. This security mix is designed to meet a mandate of positive total returns if, over the course of the next 12 months, interest rates increase by 100 basis points (bps) and only minimal losses if interest rates increase by 200 bps over the same period.
With return of principal as the first priority, the Stability strategy also seeks to generate return on principal. Strategically allocating to callable and noncallable municipal bonds that meet our low volatility mandate, we pursue returns above those of cash and traditional cash investments, such as Treasury Bills, money market funds, and bank certificates of deposit. With higher after-tax return potential — and anchored by our strict downside risk mandate — we believe this strategy is an attractive solution for investors looking to put cash to work.