Short-Term Tax Exempt Strategy

 

Objective:

This strategy seeks to provide current income, exempt from federal income taxes, while providing liquidity and preserving capital.

Strategy:

APA’s primary focus is to produce attractive tax-free yields through active management of well-diversified municipal portfolios with an average duration of 0-2 years.

APA Municipal Bond Team:

APA’s investment professionals utilize a top down and bottom up approach in order to add value through our active management program. Nine of APA’s Investment Professionals, including the  credit research team, portfolio managers and analysts focused on this strategy.

Investor Benefits:

· Customize portfolios to meet our clients’ specific tax objectives, income requirements and risk tolerance.

· Identify relative value and utilize credit analysis to take advantage of pricing inefficiencies in the market.

· Provide ongoing internal analysis of credit quality and underlying fundamentals.

·  Active Management which can potentially provide additional total return over the lifetime of the portfolio.                                                                                                                  

 

Investment Process Overview


Philosophy

  • APA’s active management and effective trade execution allow us to attempt to capitalize on inefficiencies in the municipal market and add value for our clients
  • We construct our portfolios with an emphasis on high quality investment grade municipal securities while providing a high level of liquidity

Objectives

  • Preservation of principal consistent with client’s portfolio risk exposure
  • Produce returns that exceed the appropriate benchmark while attempting to control overall portfolio volatility

Value Added Strategies


Yield Curve Positioning

  • Analyze yield curve to help determine the most favorable risk/reward profile

Credit Analysis

  • Monitor credit trends to capture incremental yield

Sector/Security Allocation

  • Seek to capitalize on inefficiencies across different sectors, maturities, bond structures and issuers

Tax Efficiency

  • Identify and opportunistically harvest losses

Risk Assessment

  • Seek to minimize interest rate risk and monitor potential credit issues

 

 

Disclosures:


Past performance is not indicative of future results. This material is not financial advice or an offer to sell any product. The performance and portfolio characteristics shown relate to the APA Enhanced Short-Term Tax-Exempt Composite (the “Composite”).

Not every client’s account will have these exact characteristics. The actual characteristics with respect to any particular client account will vary based on a number of factors including but not limited to: (i) the size of the account; (ii) investment restrictions applicable to the account, if any; and (iii) market predicaments at the time of investment. APA reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. The information provided in this report should not be considered a recommendation to purchase or sell any particular security. There is no assurance that any securities discussed herein will remain in an account’s portfolio at the time you receive this report or that securities sold have not been repurchased. The securities discussed may not represent an account’s entire portfolio, and in the aggregate may represent only a small percentage of an account’s portfolio holdings. It should not be assumed that any of the security transactions, holdings or sectors discussed were or will prove to be profitable, or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance of the securities discussed herein.

APA is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about the advisor including its investment strategies and objectives can be obtained by visiting www.assetpreservationadvisors.com. A list of composite descriptions is available upon request.

For comparison purposes, the Composite is measured against the BofA Merrill Lynch Municipals 1-3-Year Index. This index t racks t he p erformance of tax-exempt investment grade debt publicly issues by US states and territories, and their political subdivisions, in the US domestic market. Qualifying securities must have at least 1 year and less than 3 years remaining term to final maturity, a fixed coupon schedule and an investment grade rating (based on average of Moody’s, S&P and Fitch). The volatility of the index could be materially different from that of the Composite. It is not possible to invest in the index.

Returns are presented gross and net of investment advisory fees and include the reinvestment of all income. Gross returns will be reduced by investment advisory fees and other expenses that may be incurred in the management of the account.

The fee schedule for APA’s investment advisory services for separately managed accounts in the APA Enhanced Short-Term Tax-Exempt Composite is 0.25% on net assets under management. Actual investment advisory fees incurred by clients may vary. A complete description of APA’s fee schedule can be found in Part 2 of its FORM-ADV which is available at www.assetpreservationadvisors.com or by calling (404) 261-1333.

Short Term APA-18-186