Investment Strategies - Carret Kansas Tax-Exempt Bond Fund

We manage the Carret Kansas Fund (the “Fund”) for total return and tax-exempt income. The Fund seeks to preserve capital while preserving current income for investors that is exempt from both federal and Kansas state income taxes.

 

The Fund invests in a blend of investment grade, intermediate to longer-term Kansas municipal obligations with maturities ranging from 1 to 20 years and maintains a weighted average portfolio maturity of between 7 and 12 years. In addition to being diverse, the Fund maintains a high quality average credit rating. The Fund currently holds over 150 bond positions issued by over 50 distinct municipal entities from within the state of Kansas.

 

At Carret, we see ourselves as value investors, and allow value to be one of the key drivers in portfolio construction, with the goal of purchasing individual securities that satisfy both our credit and valuation criteria. Just as important, we invest with a long-term approach, employing patience and discipline in being stewards of the Fund.

 

Our active investment process takes into account national and regional economic inputs, interest rate and credit trends, supply and demand flows, and relative market values and yields. Our market strategy thoughtfully considers how pricing, coupon, duration, rating, and call features work together.* Our sector analysis focuses on credits from the major sectors of the U.S. municipal bond market, including general obligation, school district, pre-refunded, and essential purpose revenue bonds. Final security selection depends on the expected performance characteristics of each type of bond.

 

The fund will not invest in bonds that are subject to the Alternative Minimum Tax.

 

Glossary of Terms

 

Coupon: The rate of interest payable annually. Where the coupon is blank, it can indicate that the bond can be a “zero-coupon,” a new issue, or that it is a variable-rate bond.

 

Duration: The weighted maturity of a fixed-income investment’s cash flows, used in the estimation of the price sensitivity of fixed-income securities for a given change in interest rates.

 

Call feature: Subject to payment of the principal amount (and accrued interest) prior to the stated maturity date, with or without payment of a call premium. Bonds can be callable under a number of different circumstances, including at the option of the issuer, or on a mandatory or extraordinary basis.

 

Disclosures

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Mutual funds, annuities, and other investments are not insured or guaranteed by the FDIC or by any other government agency or government sponsored agency of the federal government or any state, not deposits, obligations, or guaranteed by any bank or its affiliates and are subject to investment risks, including possible loss of the principal amount invested.

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Fixed-income securities are subject to the risk of the issuer’s inability to meet principal and interest payments on its obligations (i.e., credit risk) and are subject to price volatility resulting from, among other things, interest rate sensitivity, market perception of the creditworthiness of the issuer and general market liquidity (i.e., market risk). Generally, fixed-income securities will decrease in value if interest rates rise and will increase in value if interest rates decline. Securities with longer durations are likely to be more sensitive to changes in interest rates, generally making them more volatile than securities with shorter durations. Lower rated fixed-income securities have greater volatility because there is less certainty that principal and interest payments will be made as scheduled.

 

The Fund will invest in municipal bonds that are investment grade (rated Baa/BBB or better, as rated by a nationally recognized statistical rating organization, such as Moody’s Investor Service Inc. (“Moody’s”), Standard & Poor’s Corporation (“S&P”), or Fitch Ratings Ltd. (“Fitch”). Some income may be subject to state and local taxes and to federal alternative minimum tax. Capital gains, if any, are subject to tax.

 

An investor should consider investment objectives, risks, charges and expenses carefully before investing. Read the Prospectus carefully before investing.
 

The Carret Tax-Exempt Bond Fund is distributed by ALPS Distributors, Inc.