INVESTMENT STRATEGIES
NAM offers a variety of state and national portfolios, all of which can be managed
according to the limited maturity, intermediate- or long-term strategies.
State-specific portfolios hold only bonds from the client's state residence or U.S.
territories (income from U.S. territorial bonds is free from state income tax in
all 50 states). All state-specific portfolios may be managed as state-preference
portfolios if desired.
State-preference portfolios hold bonds from the client's state of residence or U.S.
territories, which together will account for a minimum of 50% of the portfolio.
Out-of-state bonds may total up to 50% of the portfolio.
The national preference portfolio is a national portfolio with a secondary preference
to the client's state of residence according to supply, relative value and strategic
guidelines.
NAM manages the remaining states as a nationally diversified portfolio. It can hold
bonds of all U.S. states, District of Columbia and U.S. territories.
Utah taxes income from states who tax the income from Utah bonds. This portfolio
is constructed from national bonds whose income will not be taxable under the new
law. It is not a Utah preference portfolio.
Which is best?
How do in-state bonds compare with out-of state bonds? To compute the additional
yield required from out-of state bonds to equal tax free in-state bonds, use this
calculation:
For example, suppose national yields are 5.10% and the state tax rate is 5%. Investors
in the 35% federal tax bracket would require 17 basis points to break even.
