CORE TAX-EXEMPT

Investment Objective and Strategy

AAM's Core Tax-Exempt Strategy seeks to offer investors tax-exempt income with a secondary emphasis on capital preservation. The strategy invests primarily in investment grade, short-to-intermediate maturity municipal bonds.

Investment Process

Disciplined. Research-based. Focused on finding value while managing risk.

AAM’s Core Tax-Exempt Strategy is actively managed by a committee of investment professionals. Top down economic analysis is employed to determine composite duration and credit risk exposure. Bottom-up valuation is utilized for security selection with an emphasis on balance through diversification across geography, revenue source, maturity, bond structure and position size. The management team actively seeks opportunities for improving income and risk-adjusted returns through fundamental analysis, rigorous security selection, portfolio diversification, and credit monitoring.

AAM utilizes a four-step process for portfolio construction:

Duration is set based on AAM’s interest rate outlook and top-down economic cycle analysis.
Economic cycle analysis seeks to identify the optimal credit risk exposure.
Bottom-up security valuation and selection focused on maturity, credit quality and coupon.
Emphasizes balance through diversification across geography, revenue source, maturity, bond structure and position size.

Under normal conditions, AAM will seek to invest strategy assets in accordance with the investment objectives as stated above. Unusual market conditions, special instructions and/or account restrictions may cause individual accounts to exhibit characteristics outside of the stated objectives and may impact our ability to achieve stated objectives.

See the ADV for Advisors Asset Management, Inc. for more information about the firm, fees, strategies and related risks. The results and portfolios for individual portfolios may vary. Investment returns and principal value will fluctuate and there can be no assurance that any strategy’s objective will be achieved.

The Bloomberg Municipal 1-10 Year Blend Index measures the performance of municipal bonds with maturities between one and 10 years and is a component of the Bloomberg Barclays Municipal Bond Index, which covers the USD-denominated long-term tax-exempt bond market. The index has four main sectors: state and local general obligation bonds, revenue bonds, insured bonds, and pre-refunded bonds.

Principal Risks: Fixed income securities, including municipal bonds, are subject to certain risks including, but not limited to: Interest rate risk is the danger that changes in interest rates may cause a decline in the market value of an investment. Credit risk is the risk that the bond issuer may not be able to pay interest or return principal due to changes in the financial condition of the issuer, borrower, counterparty, or underlying collateral. Market risk, or systematic risk, is the risk that results from the characteristic behavior of an entire market or asset class. Below investment grade securities, also known as high yield or junk securities, may be considered speculative and may be subject to greater market and credit risks. Accordingly, the risk of default may be higher than with investment grade securities. In addition, these securities may be more sensitive to interest rate changes and may be more likely to make early returns of principal. AAA, AA, A, and BBB are investment grade ratings; BB, B, CCC/CC/C and D are below-investment grade ratings. Prepayment risk is the risk that debt issuers may repay or refinance their loans or obligations earlier than anticipated. Duration risk measures the sensitivity of a bond’s price to a one percent change in interest rates. The higher a bond’s duration, the greater its sensitivity to interest rates changes.

CRN: 2022-1128-10482 R Link 7436

Portfolio Facts

Strategy Inception:	11/2004
Benchmark:	Bloomberg Municipal 1-10 Year Blend Index
Objective:	Tax-exempt Income and Capital Preservation
Minimum Investment:	$125,000