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Separately Managed Account Tools

MUNICIPAL PORTFOLIO SOLUTIONS TOOL

Create and compare municipal laddered bond portfolios using hypothetical interest rate changes over time and customizable inputs centered around your clients’ needs.

 

 

 

 

 

 

 

 

Things 

to Know


What is a bond ladder?  

 

A bond ladder refers to a portfolio of bonds purchased at staggered terms of maturity. As one bond matures, the owner is paid its principal, which is then invested in new, similar bonds at the end of the ladder.


Is it possible to customize this solution for a client?  

 

Our SMA solutions are designed to be flexible.  Our team works with clients to specialize and customize investments according to their values, interests, and more.


What is the minimum

investment to open a

Municipal Fixed Income

SMA account?  

 

The minimum investment for this strategy is $100,000


What is Yield to Worst (YTW)?  

 

Yield to Worst refers to the lowest yield that can be received on a bond within its term to maturity and without defaulting. 


What is Tax Exempt

Income?  

 

Tax Exempt Income refers to the income that can be received on a bond(s) annually minus any associated effects of amortization when premium bonds are purchased. This income is also often exempt from U.S. Federal taxes.

Resources & Insights


 

This material is provided at your request for informational purposes only. It is not an offer or solicitation to buy or sell any securities.

THIS MATERIAL DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY JURISDICTION WHERE OR TO ANY PERSON TO WHOM IT WOULD BE UNAUTHORIZED OR UNLAWFUL TO DO SO.

Prospective investors should inform themselves as to any applicable legal requirements and taxation and exchange control regulations in the countries of their citizenship, residence or domicile which might be relevant.

Goldman Sachs does not provide legal, tax or accounting advice, unless explicitly agreed between you and Goldman Sachs (generally through certain services offered only to clients of Private Wealth Management). Any statement contained in this presentation concerning U.S. tax matters is not intended 92 or written to be used and cannot be used for the purpose of avoiding penalties imposed on the relevant taxpayer. Notwithstanding anything in this document to the contrary, and except as required to enable compliance with applicable securities law, you may disclose to any person the US federal and state income tax treatment and tax structure of the transaction and all materials of any kind (including tax opinions and other tax analyses) that are provided to you relating to such tax treatment and tax structure, without Goldman Sachs imposing any limitation of any kind. Investors should be aware that a determination of the tax consequences to them should take into account their specific circumstances and that the tax law is subject to change in the future or retroactively and investors are strongly urged to consult with their own tax advisor regarding any potential strategy, investment or transaction.

There is no guarantee that objectives will be met.

This information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. This material has been prepared by GSAM and is not financial research nor a product of Goldman Sachs Global Investment Research (GIR). It was not prepared in compliance with applicable provisions of law designed to promote the independence of financial analysis and is not subject to a prohibition on trading following the distribution of financial research. The views and opinions expressed may differ from those of Goldman Sachs Global Investment Research or other departments or divisions of Goldman Sachs and its affiliates. Investors are urged to consult with their financial advisors before buying or selling any securities. This information may not be current and GSAM has no obligation to provide any updates or changes.

Risk Measurement is calculated based on a portfolio's duration; a duration of 0 to 3 years is considered 'Low' and a duration of 3.5-4.5 years is considered 'Medium'.

Investments in fixed-income securities are subject to credit and interest rate risks. Bond prices fluctuate inversely to changes in interest rates. Therefore, a general rise in interest rates can result in the decline in the bond’s price. Credit risk is the risk that an issuer will default on payments of interest and principal. This risk is higher when investing in high yield bonds, also known as junk bonds, which have lower ratings and are subject to greater volatility. All fixed income investments may be worth less than their original cost upon redemption or maturity. Income from municipal securities is generally free from federal taxes and state taxes for residents of the issuing state. While the interest income is tax-free, capital gains, if any, will be subject to taxes. Income for some investors may be subject to the federal Alternative Minimum Tax (AMT). Alternative Minimum Tax (AMT) is a federal tax aimed at ensuring that high-income individuals, estates, trusts, and corporations pay a minimal level income tax. For individuals, the AMT is calculated by adding tax preference items to regular taxable income.

Portfolios and benchmarks are not rated by an independent ratings agency. GSAM may receive credit quality ratings on the underlying securities of portfolios and their respective benchmarks from the three major rating agencies: Standard & Poor’s, Moody’s and Fitch. GSAM calculates the credit quality breakdown and overall rating for both portfolios and their respective benchmarks according to the client’s preferred method or such other method as selected by GSAM in its sole discretion. The applicable method may differ from the method independently used by benchmark providers. Securities that are not rated by all three agencies are reflected as such in the breakdown. For illustrative purposes, GSAM converts all ratings to the equivalent S&P major rating category when reporting the credit rating breakdown. Ratings and portfolio credit quality may change over time. Unrated securities do not necessarily indicate low quality, and for such securities the investment adviser will evaluate the credit quality.

The Yield to Worst is updated on a daily basis.  Average coupon is subject to change.

This tool describes potential tax implications only. Investments may also impose fees on investors and such fees will reduce an investor's returns. Goldman Sachs does not provide accounting, tax, or legal advice. Nothing communicated to you, including within this document, should be considered tax advice. We have made no representations with respect to the tax consequences of the transactions contemplated herein. This tool addresses only federal and state ordinary income tax rates.  Other than NII, no other federal, state, or local tax matters of any kind were considered. This tool is intended for US individual taxpayers and is not applicable to trusts, estates, corporations or persons subject to special rules.

All tax equivalent yields are calculated assuming the investor’s marginal total tax rate equals the sum of their federal tax rate + state rate + tax rate on net investment income. This may not be reflective of an investor’s actual effective tax rate on income.

For the purposes of this calculator, your MAGI is assumed to equal your taxable income. The calculator assumes no itemized deductions.

The 3.8% Net Investment Income (NII) federal tax applies to individuals, estates and trusts with modified adjusted gross income (MAGI) above applicable threshold amounts ($200,000 for single and head of household; $250,000 for married filing jointly). NII generally includes gross income from taxable interest, dividends, annuities, royalties and rents (unless derived from a trade or business that isn’t a passive activity or a trading business) and net gains on assets generating NII, net of allowable expenses.

The calculation of state income tax rates assumes that your taxable income for state tax purposes equals your federal taxable income. Material variations could cause your state tax rate to be overstated or understated. This analysis ignores the AMT imposed by certain states, the limited deduction for federal income taxes paid that is available in certain states and the limited itemized deduction for state and local income taxes paid that is available in certain states. The tool does not account for federal AMT, to the extent relevant.

This tool addresses only federal and state interest income which both are generally subject to ordinary income tax rates.

The taxability of bond types can vary by state and analysis of most specific state rules is not considered for this tool. For the purposes of this tool, state tax rate does not apply to the Taxable Equivalent Yield to Worst calculation when Illinois, Iowa, or Wisconsin is selected as the ‘State Strategy’ in Step 2, given interest income is taxable for residents.

The federal and state tax rates and other assumptions reflected in the tool are based on tax law as of May 15, 2021. Accordingly, the federal and state tax rates may not be current and in any event may not apply to your individual tax situation. Please note that this tool does not take into account any pending federal or state tax proposals. Investors should be aware that a determination of the tax consequences to them should take into account their specific circumstances and that the tax law is subject to change in the future or retroactively and investors are strongly urged to consult with their own tax advisor regarding any potential strategy, investment or transaction.

Goldman Sachs does not provide legal, tax or accounting advice. Any statement contained in this presentation concerning U.S. tax matters is not intended or written to be used and cannot be used for the purpose of avoiding penalties imposed on the relevant taxpayer. Notwithstanding anything in this document to the contrary, and except as required to enable compliance with applicable securities law, you may disclose to any person the US federal and state income tax treatment and tax structure of the transaction and all materials of any kind (including tax opinions and other tax analyses) that are provided to you relating to such tax treatment and tax structure, without Goldman Sachs imposing any limitation of any kind. Investors should be aware that a determination of the tax consequences to them should take into account their specific circumstances and that the tax law is subject to change in the future or retroactively and investors are strongly urged to consult with their own tax advisor regarding any potential strategy, investment or transaction.

Confidentiality

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