Taxable Accounts/CA Muni Bond Funds?

5 replies [Last post]
ChrisVarick's picture
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Joined: 2008-09-04

I have a 47 year old client with 200k in CD money, doesn't necessarily need the funds short term. I'm trying to build a CA muni bond fund portfolio for him, what would you guys recommend? I'm looking at Highmark CA short term with a mix of Franklin's CA intermediate as well as Lord Abbett's CA Tax Free. I can charge a fee for my services yet, but what do you guys think about loaded index funds for taxable accounts? Anyone know of any C share families?

I am legend's picture
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Joined: 2010-03-04

What do you mean C share families??  Most fund families havve C share funds.  I am assuming the client lives in CA??  What do you mean doesn't necessarily need to funds short term?  He either does or he doesn't.  Does he have the risk tolerance for this or will he "need" the money short term if the funds go down?

ChrisVarick's picture
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Joined: 2008-09-04

I meant loaded index funds that are available in C shares. Yes the client lives in CA. He does not need the funds short term and has a fairly aggressive risk tolerance. His house is paid off and the only reason I can see him needing the funds short term is if his business goes down, but I doubt that would be happening.What are you doing for funds inside taxable accounts?

LSUAlum's picture
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Joined: 2009-10-18

Why is he in Fixed Income if he doesn't need income, is only 47, and has a high risk tolerance? Given interest rates it's likely that he'll do better in an equity heavy position. If he has to have FI I'd go with short duration bond funds and depending on his tax rate that may not be short duration tax free. Short Duration is to hedge his equity risk not for income. I don't see him needing long or intermediate duration bonds given what information you've shared.

navet's picture
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Joined: 2010-02-25

At his age and risk tolerance why not offer a rising dividends fund? If he does need income, take some from the fund, but if not, then reinvest dividends and get some nice(hopefully) capital gains.

ChrisVarick's picture
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Joined: 2008-09-04

LSUAlum wrote:Why is he in Fixed Income if he doesn't need income, is only 47, and has a high risk tolerance? Given interest rates it's likely that he'll do better in an equity heavy position. If he has to have FI I'd go with short duration bond funds and depending on his tax rate that may not be short duration tax free. Short Duration is to hedge his equity risk not for income. I don't see him needing long or intermediate duration bonds given what information you've shared.You're absolutely correct. Right now I'm looking at a combination of the tax managed equity line up from Eaton Vance, Russell, and Goldman Sachs and possibly some C share index funds for the client. In terms of short duration bond funds, I'm looking at the Pimco CA Short Term Tax Free.Which equity funds do you use for your taxable accounts?

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