Investment philosophy

One of the key investment mantras at 16th Amendment is know what you own. In a market with more than 1.5 million cusips, we rely on the following in constructing portfolios:

Focus on Market Fundamentals and the Underlying Issuer

The municipal market is a supply and demand driven market. Paying constant attention to fund flows, issuance patterns, redemption cycles and tax policy are some of the critical components to decision making

Emphasize frequent issuers and large deal or CUSIP sizes

Look through credit enhancement to the underlying bond and its credit

Know the Structure

Understanding the structural features of a bond is essential

Unlike traditional corporate bonds, municipal bonds generally trade on a price to worst basis (not option adjusted duration)

Call features, market discount taxation, coupon and tranche size can all affect liquidity and performance

Do Not Sacrifice Liquidity for Diversification

Unlike equity investing where diversification is critical to portfolio construction, in municipals, we believe that you are better off owning fewer more liquid credits in institutional block sizes than many smaller odd lots


We emphasize ultra-high-grade and essential service bonds; not “yield” enhancing positions which add risk

Do Not Stretch for Yield

The investment grade market is large enough to find opportunities without “stretching” for yield or alpha

Be Proactive

Monitor portfolios regularly

The municipal market is affected by exogenous and non-exogenous factors which can impact portfolio values

Make tactical adjustments