Tax-Exempt Bonds

Cavanaugh Capital Management (CCM) structures municipal bond portfolios to satisfy each client's need for high after-tax returns, while ensuring safety of principal. The portfolio management team strives to limit price volatility in changing interest rate environments. CCM is an active bond manager, continuously evaluating the bonds held in client portfolios against new opportunities.

The firm’s tax-exempt strategy seeks to identify opportunities in the primary and secondary markets in order to exploit inefficiencies. By employing rigorous bond analysis, the portfolio management team examines each bond's underlying credit, the financial condition of the issuer, the status of the regional economy, and the specific call and sinking fund provisions under each indenture.

Both the security selection process and the manner in which the team structures municipal bond portfolios serve as critical elements to the team’s success. Keeping client guidelines in mind, CCM diversifies each portfolio's holdings by bond characteristics, geography, sectors and issues. Moreover, the team consults with client tax advisors to develop strategies in order to enhance after-tax returns.

One of the nuances in the municipal market is the wide variation in price for individual issues. To ensure the best execution for each client, CCM accesses a broad network of municipal bond dealers to obtain the best prices. Consisting of national as well as regional firms, this network of dealers provides the firm’s clients with a wide array of investment opportunities.