Investment Process
The Dana Municipal Bond Strategy seeks to provide a high level of current, tax-advantaged income with limited risk and price volatility. The Strategy starts by addressing overall market conditions, the client’s tax status. Then, utilizing a highly selective screening process, Dana uncovers overlooked value in the municipal bond market. Diversifying in terms of quality, coupon rate, and geographic location further expands the opportunity for adding value while at the same time reducing risk.
Portfolio Composition
This Strategy invests nationally in municipal fixed income securities. Specific emphasis is placed on general obligation bonds, revenue bonds, and secured state housing finance authority bonds. Dana adds value by using proprietary models to uncover value in state housing sector securities with certain redemption provisions. In particular, these securities allow Dana to construct portfolios that provide excess yield, with a high level of quality resulting in less interest rate risk than traditional portfolios. Client portfolios generally contain 15-25 issues, and generate organic cash flows consisting of interest and principal pay-downs which typically run at a rate of 20% per annum.
