Tax-Exempt High Income

The strategy’s primary investment objective is to provide current income exempt from regular federal income tax, in an otherwise low yield environment, by investing primarily in tax-exempt securities, with a focus on securities that are rated below investment grade, including unrated securities.

Blue Heron believes that the tax-exempt high income space, and particularly our focus on project revenue debt, can generate a level of income not easily found elsewhere.  The strategy offers attractive tax-advantaged Income, diversification and low correlation to other asset classes, compelling risk/reward attributes and low default rates. We consider this asset class to be a representation of the high yield market, and as such, the strategy is designed to be a complement to an existing high grade portfolio.

Blue Heron’s process is centered on credit - the ability to find bonds and underlying projects at the best relative value and that will perform over time. Credit shapes our entire investment process. We focus on project revenue bonds in sectors deemed vital to the economy, such as healthcare, transportation, power, energy, education (public/private), and manufacturing. Rather than simply mirroring a benchmark, we focus on those sectors that we believe present the best relative value and greatest upside potential in an effort to uncover investment opportunities that may produce a high stream of federally tax-free income.

The strategy emphasizes higher yielding securities that are also subject to greater risk. This risk is mitigated by a comprehensive and thorough investment process that includes an analysis of credit holdings and frequent reviews of holdings in the strategy. Although our primary objective is income, this is not an “income at any cost” approach.