Sierra California Municipal Bond Program

Ideal for high tax-bracket investors seeking California and Federal tax-free yield.

Program Description

The Sierra California Municipal Bond Program seeks to produce satisfying long-term returns while limiting downside risk. The interest income from California municipal bonds is tax-free at the state and federal level, providing a particularly valuable benefit for clients in relatively high tax brackets. The strategy diversifies a client’s account among at least four, often up to ten, California municipal bond mutual funds. Each holding is monitored daily, and during significant declines, the team implements a defensive stop-loss discipline with the goal of limiting drawdowns. The strategy will be fully invested when there are many buy signals and will, at times, be fully in cash when the universe of California municipal bond mutual funds are showing sell signals.

Goals*

Targets an average annual total return of 3%-4% or more per year, after fees, while limiting downside risk to 5%, even in a bad month or quarter.

On a maximum tax-equivalent basis, targets an average annual return of 6%-7%.

*Although Sierra believes its risk-mitigating disciplines will continue to limit the impact of major market declines, no assurance can be given that these goals can be consistently achieved in the future.