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Another Asset Allocation Tool
Incorporating a fixed-income component into your portfolio can offer an even
greater opportunity to protect against downside risk and enhance the tax
efficiency of your portfolio. Through Nuveen Asset Management, we are able to
offer investors actively managed, high-quality, municipal bonds. As the chart
below shows, over the 1987 to 2006 period, balanced portfolios combining
municipal bonds and equities provided superior after-tax returns with
significantly less risk than similar Treasury and corporate blends.
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| Past performance is no guarantee of future results |
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| Source: Nuveen Research. These conclusions are based on
research done by Nuveen Investments using the following portfolio assumptions:
Municipal bonds are represented by the Lehman Brothers Long Municipal Index.
Corporate Bonds are represented by Lehman Brothers Long Credit Index. Treasury
Bonds are represented by Lehman Brothers Long Treasury Index. Equities are the
S&P 500 stocks as tracked by the Ibbotson Associates Large Company Stock
Index. It is not possible to invest directly in any of these indexes.
Hypothetical portfolios using varying percentages of municipal bonds and
equities, in each case totaling 100%, were constructed, and the investment
results and volatility determined for every year from 1987 through 2006. |
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| All investment income generated by the portfolio was
considered to be reinvested annually, along with the after-tax proceeds of an
arbitrarily assumed 20% annualized turnover rate. The allocation between the
two assets was allowed to roam within a 5% band around its target before
rebalancing. No provision was made for investment fees or commissions.
Investment income was taxed at the historically appropriate rate for an
individual with $100,000 in taxable income in year 2006 dollars. Net capital
gains taxes, if any, were deducted at the rate appropriate for the period. At
the end of 2006, the portfolios were fully liquidated to recognize the existing
tax liability. |
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| This study was based on historical data gathered from sources
Nuveen Investments considers to be reliable and consistent. The results
produced by this study indicate past performance of market indices over the
1987-2006 time period and in no way should be considered representative of the
past performance of any actual investment product or predictive of future
investment expectations and performance for the municipal market or any actual
investment products. |
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