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Finding Opportunities in Municipal Fixed Income

Why Invest in Munis Now?

The municipal bond market’s evolution over the last 10 years may create a large and diverse opportunity set for investors. We believe a well-managed municipal bond portfolio may offer attractive yield potential, high credit quality and diversification in a broader portfolio, especially within a core fixed income allocation.

The Evolution of the Municipal Bond Market

The municipal bond market has evolved significantly over the last decade. Historically, many municipal bonds were backed by insurance, which resulted in AAA credit ratings and a high correlation to US government bonds. Today, few municipal bonds are backed by insurance, increasing the diversity of municipal bond credit ratings while reducing their correlation to government bonds. We think this evolution may create attractive yield and diversification opportunities for active municipal bond investors.

The Appeal of Munis


Diversification


We believe municipal bonds can enhance the diversification of a broader portfolio, especially within core fixed income.

Annual Returns for Fixed Income Indices

(2007–2017)

Year

Asset Class

xx%

View historical performance relative to:

Source: Morningstar, Bloomberg, and GSAM. As of 12/31/17.

Past performance does not guarantee future results, which may vary. It is not possible to invest directly in an unmanaged index. Diversification does not protect an investor from market risk and does not ensure a profit.

HIDE ASSET CLASS INDEX DEFINITIONS

 

 

Our Muni Funds

Why GSAM Municipals?

GSAM has been managing municipal bond assets for clients for nearly three decades, with $42.5 billion in assets under supervision as of March 20181. Our team of 17 investment professionals dedicated to municipal bonds, including seven analysts focused on municipal credit research.

GS Short Duration Tax-Free Fund

Seeks high quality, short-term tax-free income

GSDUX

Share Class: Institutional

★★★★

Morningstar Risk-Adjusted Ratings: GS Short Duration Tax-Free Fund (Muni National Short Category) - Class I Shares 3 Year 4 stars out of 179 funds, 5 Year 4 stars out of 158 funds, 10 year 3 stars out of 100 funds.

GS Dynamic Municipal Income Fund

Seeks to optimize tax-free total return through an active, flexible approach

GSMTX

Share Class: Institutional

★★★★★

Morningstar Risk-Adjusted Ratings: GS Dynamic Municipal Income Fund (Muni National Intermediate Category) - Class I Shares 3 Year 5 stars out of 256 funds, 5 Year 5 stars out of 228 funds, 10 year 5 stars out of 147 funds.

GS High Yield Municipal Fund

Seeks a high level of tax-free income by investing across high yield and investment grade credit

GHYIX

Share Class: Institutional

★★★★★

Morningstar Risk-Adjusted Ratings: GS High Yield Municipal Income Fund (High Yield Muni Category) - Class I Shares 3 Year 5 stars out of 154 funds, 5 Year 5 stars out of 126 funds, 10 year 5 stars out of 79 funds.

Related Resources

Municipal Fixed Income Fund Offerings

GS Dynamic Municipal Income Fund

Quarterly Fund Update