US Intermediate Municipal Bond
Schroders' municipal bond strategy seeks principal preservation with a high level of after-tax yield and income.
Schroders Intermediate Municipal Bond investment strategy seeks to maximize after-tax yield and income by investing across the spectrum of investment grade municipal debt. The strategy seeks to capitalize on structural inefficiencies in the marketplace and focuses on fundamental, bottom-up security selection. We use a team approach in constructing investment strategy and portfolio decisions are supported by fundamental and technical research.
Municipal markets are generally inefficient and lack a centralized, regulated information depository, providing investment opportunities.
We believe that an integrated team of research-driven municipal bond investors is the ideal structure to take advantage of these inefficiencies.
Using a disciplined investment process, we seek to generate consistent above benchmark returns with lower than average volatility.
Our tax-exempt fixed income process consists of four distinct steps.
- Conduct in-depth proprietary market research (fundamental, quantitative and technical) to develop investment themes that we believe will dominate the municipal market.
- Develop and prioritize investment strategies, based on investment themes and bottom up research, to pursue the highest level of return/yield per unit of risk.
- Implement investment strategies within the portfolio, using a relative value framework to prioritize investment ideas and execute security selection.
- Continually review portfolio within rigorous risk management framework, incorporating quantitative and qualitative analytic tools.
The foundation of our investment process is our weekly US Tax-Exempt fixed income meeting. Here, portfolio managers combine the outputs from our economic, quantitative and credit research to establish investment themes and resulting strategies. Relative value opportunities are discussed and prioritized. Portfolio construction, including security selection, follows and is implemented by portfolio managers.
- Research-driven investment process that emphasizes high quality and capitalizes on market and pricing inefficiencies
- Security selection is the key driver of return
- Proven consistent process over multiple market cycles
- Proprietary database covering over 1,500 prerefunded/escrowed-to-maturity issues (advance refunded bonds generally backed by US Treasuries)
- Risk management is embedded in our culture
- Separate Accounts