Laddered Municipal Bond

separately managed accounts
Laddered Municipal Bond
2016 profile
Investment Objective
General Account Information
▪▪ Seek to provide tax-efficient current income from a portfolio
▪▪ High-quality bonds (A– or better)1
of municipal bonds that will typically be held to maturity or
are sold as they reach the portfolio’s minimum maturity
▪▪ New accounts are invested within approximately 4-6 weeks2
Investment Process
Investment Philosophy
▪▪ Manage risks to aid investment performance consistency
▪▪ Build a portfolio of laddered municipal bonds of the
▪▪ Design client portfolios to provide current income that seeks
to enhance the risk-adjusted return of an entire portfolio
▪▪ Monitor credit worthiness of portfolio positions; no active
trading unless warranted by credit events3 or client cash
flow needs4
▪▪ Use a value-oriented approach to rigorously evaluate securities
and sectors, select what we believe are attractive bond structures
and position the portfolio within appropriate maturity ranges
Tailoring Options
▪▪ Unique tailoring opportunities are available, please work with
your financial advisor to determine what options work best
▪▪ Option to omit bonds subject to AMT
▪▪ Tax-aware investing when repositioning legacy holdings
in a new account
designated maturity
▪▪ Maintain designated maturity of the ladder by purchasing
new bonds in the longest available maturity in the strategy’s
range to replace those that mature or are sold as they reach the
minimum maturity range
▪▪ The strategy may invest in callable bonds, which if called prior
to maturity, will generate the need to reinvest the proceeds in
a manner that will maintain the composition of the specific
laddered portfolio
▪▪ Nuveen Asset Management reviews legacy holdings and
makes recommendations based on their fit with objectives
1–7 Year
Municipal Ladder
1–10 Year
Municipal Ladder
1–15 Year
Municipal Ladder
5–15 Year
Municipal Ladder
10–25 Year
Municipal Ladder
Maturity Ranges
1–7 years
1–10 years
1–15 years
5–15 years
10–25 years
Credit Range
AAA to A
AAA to A
AAA to A
AAA to A
AAA to A
AA
AA
AA
AA
AA
Maximum Position Exposure5
15%
15%
15%
15%
15%
Typical Number of Holdings6
8–16
8–16
8–16
8–16
8–16
Minimum Initial Investment
$250K
$250K
$250K
$250K
$250K
Average Quality Target
Please see next page for additional disclosures.
1At time of purchase, bonds must be rated A-/A3 or better.
2Nuveen Asset Management, LLC (“NAM”) retains the discretion to sell any transferred security
used to fund the account that does not fit into the model portfolio.
3This strategy does not utilize the opportunistic and more active trading approach found in
certain other NAM municipal bond strategies.
4The laddered strategies are not designed for cash withdrawal where account balances drop
below $250,000. Minimum account size is $250,000.
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
5At time of purchase.
6Concentration in a small number of holdings may increase risk exposure. A $250,000
account in these strategies can typically holds 8-16 individual bonds, depending on the
strategy, under normal circumstances. The number of bonds may vary and may be greater
or fewer based on factors such as account size, client transactions and market conditions.
Accordingly, one or more individual bonds may each represent greater than 10% of the
account. A decline in value of any one or more individual bonds may have a material impact
on the account value.
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Laddered Municipal Bond
2016 profile
State Portfolios
A Leader in Municipal Bond Investing
In addition to a national portfolio, we offer:
Credit Research
▪▪ State-specific portfolios: California, Connecticut, Florida,
Michigan, New Jersey, New York, Ohio, Pennsylvania and Texas
▪▪ Experienced team of analysts evaluates bonds and sectors that
we believe may be out of favor to find value in bonds that the
general public may have overlooked.
▪▪ State-preference portfolios: Arizona, California, Connecticut,
Colorado, Florida, Georgia, Hawaii, Indiana, Kentucky,
Louisiana, Maryland, Massachusetts, Michigan, Minnesota,
Missouri, New Jersey, New York, North Carolina, Ohio,
Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah7
and Virginia
Institutional Access to Bonds and Market Places
▪▪ The inefficient municipal bond market can make it difficult for
retail investors to obtain the best prices.
▪▪ Nuveen Asset Management has established relationships with
more than 100 national and regional dealers.
▪▪ Access to multiple inventories allows portfolio managers to find
appropriate bonds at attractive prices.
Institutional Trade Execution*
 State Specific Portfolios
 State Preference Portfolios
$250,000 minimum investment
7Utah’s reciprocity provision maintains that it will not tax income from bonds issued by states
that do not tax income on Utah bonds. NAM can manage a portfolio for a Utah resident that
considers this reciprocity provision, but is not a state preference portfolio.
State-specific portfolios hold only bonds from the client’s state of residence or U.S. territories
(Puerto Rico, U.S. Virgin Islands and Guam). 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. NAM seeks to purchase
out-of-state bonds at an after-state-tax yield that is equivalent to or greater than a comparable
in-state bond. Prospective clients and their financial advisors should consider that a state-preference portfolio may provide a higher yield, better diversification and a shorter invest-up period
than a state-specific portfolio.
▪▪ Because of Nuveen Asset Management’s market presence, we
have an increased ability to find bonds in appropriate sizes at
attractive prices.
▪▪ Our presence in the municipal bond market means many
dealers call us first to trade bonds.
▪▪ We seek to aggregate trades for multiple client accounts,
where available, in order to pass along institutional prices
for client portfolios.
* Institutional trade execution applies primarily to municipal bond trading as part of ongoing
account management and generally does not include sales of legacy securities contributed to
new or existing accounts or in connection with termination and liquidation instructions. Nuveen
Asset Management, LLC seeks to expeditiously and efficiently effect sales of legacy securities
contributed to new or existing accounts or in connection with termination and liquidation
instructions, generally by directing the execution of sale to the relevant broker-dealer/custodian
designated by the client’s separately managed account program, subject to program limitations.
Primarily due to the time constraints and lot sizes applicable to these transactions, and because
the full range of trading techniques is generally not available (including aggregation), the
prices received in these transactions may be less favorable than the prices that could be attained
for sales of securities selected by NAM as part of ongoing management. Clients always reserve
the right to fund accounts with cash as opposed to legacy securities and to keep any securities in
their accounts upon termination of services.
Clients should consult their financial advisor regarding unknown financial terms and concepts.
The statements contained herein are the opinions of Nuveen Asset Management and
are provided for informational purposes only. The laddered bonds will typically be
held to maturity in the absence of material credit events, contributions/withdrawals
and calls. Initially, NAM will purchase individual bonds that are given equal weight,
with differing maturities across the specified strategy maturity range. The maturity
range is typically segmented into 1-2 year ranges (“rungs”) in which NAM will
purchase bonds creating a “ladder” of individual bonds. It will be approximately 4-8
rungs for the 1-7 years, 6-12 rungs for the 1-10 years, 7-14 rungs for the 1-15 years,
6-12 rungs for the 5-15 years, and 8-16 rungs for the 10-25 years. As bonds mature
(or are called) and cash is generated in the account, NAM will purchase additional
bonds in the longest available rung within the strategy’s bond maturity range.
There is no assurance that an investment will provide positive performance over any
period of time. Investing entails risks, including the possible loss of principal. Past
performance is no guarantee of future results. Individual investor results will vary. It
is important to review investment objectives, risk tolerance, tax liability and liquidity
needs before choosing an investment style or manager.
In addition, an investment in any municipal portfolio should be made with an
understanding of the risks involved in investing in municipal bonds, such as interest
rate risk, credit risk, call/reinvestment risk and market risk. The value of the portfolio
will fluctuate based on the value of the underlying securities. Bonds may be callable
which may increase the interest rate risk exposure in the portfolios. Upon call, a
client may be confronted with a less favorable interest rate environment than the
one that existed when the original bond was purchased. Please contact a tax advisor
regarding the suitability of tax-exempt investments in your portfolio. Nuveen Asset
Management is not a tax advisor. If sold prior to maturity, municipal securities are
subject to gain/losses based on the level of interest rates, market conditions and the
credit quality of the issuer. Income may be subject to the alternative minimum tax
(AMT) and/or state and local taxes, based on the investor’s state of residence.
APF-NLD-1215P 13692-AWC-Y-01/17
This information is intended for use by clients with their financial advisors. Financial
advisors should consider the suitability of the manager, strategy and program for its
clients on an initial and ongoing basis.
Nuveen Investments Advisers Inc. (“NIA”), a registered investment adviser provides
Separately Managed Accounts marketing services for its affiliates that are registered
investment advisers, including NAM. Both NIA and NAM are affiliates of Nuveen
Investments, Inc. This report is provided by NIA.
Nuveen Investments Advisers Inc. | 333 West Wacker Drive | Chicago, IL 60606 | 800.752.8700
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