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California State Preference Mandate

The California State Preference Mandate is a customization of our tax-efficient strategies.

EXPLORE OUR INVESTMENT STRATEGIES
Tax-Efficient
Government Credit
Core Government Credit

Maturity Based

Sustainable

With 58 counties, 480 municipal governments, over 1,000 school districts, and 3,400 “special” districts, California is the nation’s largest and most diverse issuer of municipal debt. These characteristics, combined with the state’s high income tax rate, make California in-state exposure highly desirable. The California State Preference Mandate is an investment grade municipal bond portfolio that seeks to maximize after-tax income and preserve capital. Managed in a separate account, this mandate employs active management, bottom-up credit research, opportunistic trading and proactive portfolio structuring.

Investment Objective

Maximize after-tax income and preserve capital

Eligible Investments

Tax-exempt Municipal Bonds (strategic)

Taxable Municipal Bonds (tactical)

Strategy Information

Strategy AUM: $2.9 billion

Available Maturity Structures

Limited (3 year average maturity)

Intermediate (5 year average maturity)

Long Intermediate (7 year average maturity)

Sample State Distribution*

CA 96.5%

Other 3.5%

Sample Sector Distribution

Local GO 35.3%

Water/Sewer Revenue 20.3%

Prerefunded 9.3%

Dedicated Tax 6.8%

Electric Revenue 6.5%

University 4.6%

State GO 4.4%

Lease Revenue 3.4%

Tax Allocation 2.8%

Other 5.7%

Cash 0.9%

*Sample portfolio characteristics provided above are intended to illustrate general strategy information for our Intermediate California State Preference Mandate and are subject to change given market conditions and client objectives. Actual portfolios may vary. Breckinridge’s Intermediate California State Preference Mandate typically invests 75-100% in-state. In-state percentages adjust according to market conditions and changes in tax rates. Data provided is as of 9/30/18.