|
The Near-Term Tax Free Fund could be an important addition
to your portfolio. Near-Term Tax Free has some appealing
characteristics – low volatility, attractive yields, monthly
income and daily liquidity. The fund invests in
relatively short-term municipal securities, which are exempt
from federal taxes. The short-term nature of the fund helps to
keep volatility down and provides for an attractive risk/reward
dynamic. For example, Near-Term’s worst annual return
(calendar year) over the life of the fund was –0.06 percent in
1994. That is 6 basis points, or a $6 loss on a $10,000 dollar
investment. As of June 30, 2002, the SEC 30-Day yield was
2.47 percent, with a tax equivalent yield of 4.02 percent which
compares favorably to other alternatives.
|
The fund also distributes monthly, which is particularly helpful if you are
using the fund to supplement your income. In addition, the
fund offers daily liquidity, with no minimum holding period or
early withdrawal fees. Municipal bonds have recently garnered
more attention as a safer alternative to stocks and corporate
bonds. These bonds are generally backed by the taxing power
of states, cities, counties or other related entities. Some
municipals are backed by the revenue that a particular project
generates, such as water systems, electric generation or toll
roads. Municipals have a historically low default rate; in a
Standard & Poor’s study from 1986-2000, the cumulative
default rate for investment grade municipals was 0.23 percent.
|
Investment Professionals 
