Municipal bonds are a unique fixed-income asset category in the United States – they are debt securities issued by local governments (cities, counties and states, collectively referred to as Municipalities). In the United States, Municipalities issue bonds to fund their general operations or to fund specific projects, like bridges, highways, schools or other projects for the public’s benefit. Lately, there is an increased emphasis on “green” projects such as water sustainability, renewable energy, et al.
Three of the unique attributes of Municipal Bonds are that they offer tax-free income for investors who are U.S. taxpayers, they offer lower relative credit risk and the bond market is considered to be extremely liquid (meaning one can buy and sell with the trade nudging the bond’s price).
The Blue River muni bond fund seeks to generate attractive levels of primary tax exempt income through municipal bond arbitrage, having employed the strategy since 2000 and after improving it during the significant municipal bond market dislocation in the first quarter of 2008.
Only super-qualified or accredited investors (purchasers) may invest in this hedge fund, meaning someone who has $5m net worth of investable assets (which cannot include the value of primary residence).
Risks in bond investments include default, duration, interest rate and inflation. Blue River deals with these risks in various ways and a potential investor is invited to meet with one of their representatives to learn more about this special opportunity. For risk analysis click here.
For the Blue River Muni Bond Fund structure overview, please click here.
For the latest annual factsheet (Performance Update), please click here.