Short-Term Municipal Fixed Income Philosophy

Appleton Partners Short-Term Fixed Income is a low-risk investment alternative offering individual and institutional clients a tailored investment portfolio that not only satisfies their liquidity needs, but also grows capital. Each client's bonds are held in their name at an independent custodian. Appleton works with the client to define investment objectives, assign a duration target and appropriate benchmark, and determine any cash flow needs. Credit quality is high, with securities rated A or better. Active management and continuous monitoring of the financial markets, economic trends, and individual security performance, allows Appleton to add value and take advantage of opportunities as they emerge. By capturing premium, capitalizing on the roll- down effect on the yield curve, and taking advantage of the supply and demand imbalances in the markets, the short-term fixed product is built to offer both flexibility and value.

Portfolio Objective:

Preservation and growth of capital in a tax-efficient manner with disciplined management of liquidity risk, interest-rate risk and credit risk

Investment Guidelines:

  • ELIGIBLE INVESTMENTS: General obligations and revenue bonds of state and local governments of the United States and United States Territories.
  • WEIGHTED AVERAGE DURATION: 2.0 to 3.0 Years
  • MATURITY RANGE: 1 to 6 Years
  • AVERAGE CREDIT QUALITY: Average Aa1 or better, less than 5.0% below A
  • LIQUIDITY: Managers access highly marketable issues in both new issue and secondary markets.
  • DIVERSIFICATION: National portfolios with target of 40% to 60% of in-state bonds for clients residing in specialty states.
  • ISSUER GUIDELINES: 5.0% position limit and maximum of 15.0% per issuer at the time of purchase
  • TRADING: Conducted with “best execution” at the time of the trade to minimize transaction cost and maximize return.
  • TAX POLICY: Transactions executed with consideration of client's tax consequences. No AMT bonds purchased for client accounts.
  • BENCHMARK: Lehman Brothers 3Yr Municipal
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