Fiera Capital Tax Efficient Core Intermediate 1-10 Yrs SMA seeks to generate tax efficient, risk-adjusted returns with an emphasis on generating a lower volatility return stream. The SMA follows a capital preservation focused investment process as it attempts to outperform its benchmark, the Bloomberg 1-10 Year Municipal Index.
Benchmark: Bloomberg 1-10 Year Municipal Index
Focused on short to intermediate maturities, high quality, and large liquid issues. Investment grade securities with those rated A rated or below typically limited to 25%. Securities maturing beyond 12 years are limited to 15% of portfolio.
After-Tax Risk-Adjusted Return Focus
Invested in the higher portion investment grade spectrum, the team applies a relative value investment approach across multiple investment grade fixed income sectors (tax-exempt and taxable), looking for undervalued securities that are more likely to have inherent limited downside participation due to their valuation.
Ongoing monitoring of key analytics including correlations, contribution to duration, stress test/sensitivity analysis and liquidity.
The Tax Efficient Fixed Income team seeks to offer investment strategies that exhibit a high degree of quality control and effective risk management by utilizing a disciplined, tax-efficient, capital preservation focused investment process. Through their disciplined investment process, they seek to offer clients the benefits of fixed income as an asset class in a manner consistent with the characteristics of the benchmark selected by the client. The team believes the disciplined, tax efficient process is best suited for capital preservation-oriented investors, seeking low volatility, income and after-tax total returns.
Investment Committee utilizes both macro indicators and municipal market data to drive active management positioning. Strategies are set within the context of the investment outlook adopted by the committee. Fiera Capital’s fixed income team adjusts several variables within a given strategy, relative to their strategic norms, to reflect a regularly updated active investment outlook. Active decisions concerning yield curve positioning, quality exposure, sector allocation, security selection, and crossover opportunities are at the core of the investment process.
The investment team’s objective in credit evaluation is to help meet clients’ investment goals of preservation of capital and maximizing total return by seeking credits and special situations that will improve over time and by avoiding weak or deteriorating credits. The fundamental credit research process is designed to scrutinize the underlying risk associated with all positions within the portfolio.
- Through detailed research and analyses, the team compares similar obligors’ risk measures including an analysis of the legal structure of the bonds. This review focuses on the security provisions offered to the bondholders. If needed, the team will also utilize issuer engagement to solicit further information.
- This analysis culminates in the approval or rejection of the credit of the underlying issuer before purchase. These assessments are further updated on an ongoing basis for surveillance purposes.
Strategy guidelines are based on individual tax situation and risk tolerances, including interest rate and credit risk tolerance.
- Portfolios will consist exclusively of investment grade securities, including Municipals, Treasuries, corporates, and agencies.
- New credits approved prior to purchase for both primary and secondary issues, including ongoing monitoring of credits.
- Within strategy guidelines, active management variables are set relative to the benchmark.
- Allocations filled by the portfolio management team through primary and secondary markets.
- Regular review of portfolios for compliance with investment guidelines and Fiera Capital investment parameters
Portfolios seek to provide a stable anchor to an overall investment allocation, integrating risk management systems and procedures along each step of the investment process.
- Interest Rate and Liquidity Risk:
- Target to purchase high quality, large liquid positions by primarily focusing on issuers with over $50 million outstanding
- Seek to limit negatively convex bonds to avoid duration extension by limiting exposure to callable bonds and buying high coupons
- Credit Risk:
- New credits approved prior to purchase for both primary and secondary issues
- Ongoing credit surveillance including technology enabled local headline monitoring
- Sell Discipline:
- Credit deterioration
- Tax Loss Harvesting
- Changes to yield curve, sector, or crossover outlook
Built on a legacy of boutique investment management and entrepreneurship
Fiera Capital Corp. ("Fiera Capital") is a global investment management firm with $117 billion in AUM1 (as of 12/31/22), with over 200 investment professionals providing depth and expertise across traditional and alternative investment strategies. Fiera’s boutique structure empowers their investment teams to focus on their core competencies, while providing access to the firm’s deep resources.
Kenneth M. Potts
Senior Vice President, Fixed Income Investments
Dexter J. Torres
Senior Vice President, Head of Trading
Brian P. Meaney
Vice President, Fixed Income Investments
Senior Vice President, Quantitative Strategies
Associate Portfolio Manager
Edward J. Mardovich
Investment Analyst, Fixed Income Investments