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. Returns are created from interest income and increases in bond prices. The interest income from municipal bonds is tax-free at the federal level. California municipal bond interest is also tax-free at the state level, providing a valuable benefit for California clients. The Program diversifies a client’s account among at least four (often up to ten) California (and sometimes national) municipal bond mutual funds. Each holding is monitored daily. A proprietary stop-loss discipline is implemented with the goal of limiting drawdowns. The Program will be fully invested when there are many buy signals and will, at times, be fully in cash when 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.