Thornburg New York Intermediate Municipal Fund

A LADDERED PORTFOLIO OF INTERMEDIATE MUNICIPAL BONDS FROM NEW YORK

Thornburg New York Intermediate Municipal Fund is a broadly diversified laddered portfolio of intermediate-term, investment-grade municipal bonds from across the Empire State. Maturities range from one to 20 years, with the fund’s average duration running between four and six years. Actively laddering portfolios helps mitigate the risks of bond investing and can generate attractive returns over time.

 

Thornburg Municipal Bond Team

“This fund seeks to capture as much income as possible, subject to credit- and interest-rate risk constraints. We use a 20-year ladder to manage the maturities and seek to diversify across the state’s many municipal bond issuers. We apply a strict discipline of fundamental credit research when searching for opportunities.”

– Christopher Ryon

 

AN ACTIVELY MANAGED, INTERMEDIATE LADDER

We build a portfolio of staggered maturities so that a portion will mature each year. Money from maturing bonds provides an organic source of cash flow, and is typically reinvested in longer-maturity bonds at the top range of the ladder.

Laddering tends to perform well against other strategies because it captures price appreciation as bonds age and their remaining life shortens, and it reinvests principal from shorter, lower-yielding bonds into longer, higher-yielding bonds.

The fund’s laddered structure is one of many important contributors (credit research also among them) to the total return an investor receives over an appropriate holding period.

FUNDAMENTAL, BOTTOM-UP CREDIT RESEARCH

In bond investing, nothing is more important than determining whether the party to whom you propose to lend money has the ability and willingness to pay you back in full and on schedule.

We conduct thorough, bottom-up credit research on every bond we purchase to understand the ability of the issuer to repay obligations, and to ensure that investors are adequately compensated for the risk assumed.

DIVERSIFICATION

The portfolio is composed of roughly 60 separate positions, in part to ensure that a potential default or price decline of any one issuer has a minimal impact upon the net asset value of the portfolio.

In adjusting position sizes within the portfolio, we take into account the credit quality of the issuer (with higher-quality credits typically being afforded larger position sizes), the extent to which each issue contributes to the duration of the portfolio, and prospectus limitations.

Keep in mind that New York Intermediate Municipal Fund is not as diversified as our national funds, and macroeconomic trends within the state may impact all securities within the fund.

It’s important for investors to match their investment horizon to the duration of the strategy in which they’re invested, and to diversify tax-exempt assets across the yield curve.

This is why Thornburg offers a range of strategies—from Low Duration Municipal Fund on the short end to Strategic Municipal Income Fund on the long end—to provide a home to match every time horizon.

BEST FIXED INCOME FUND FAMILY

2012 Lipper Fund Award2012 – The firm ranked #1 out of 41 eligible firms in Lipper Inc.’s fixed income large firm universe for the three-year period ended 11/30/11.

2008 – The firm ranked #1 out of 41 eligible firms in Lipper Inc.’s fixed income large firm universe for the three-year period ended 12/31/07.

The Lipper Fund Awards program honors funds that have excelled in delivering consistently strong risk-adjusted performance, calculated with dividends reinvested and without sales charges, relative to peers. The Lipper Fund Awards program recognizes fund families with high average scores for all funds within a particular asset class or overall. Fund family awards are issued for the three-year period only. Thornburg did not win the awards for any years other than those listed above. Lipper’s Large Company universe was comprised of fund families with more than $40 billion in total net assets for the 2012 award and more than $28 billion for the 2008 award. Only fund families with at least five bond funds were eligible for the Fund Family Award.
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