UBS Municipal Trading and Portfolio Specialist Group. Understanding your options and opportunities in today s municipal bond marketplace.

Transcription

1 ab UBS Municipal Trading and Portfolio Specialist Group Understanding your options and opportunities in today s municipal bond marketplace.

2 The expertise you need to guide your municipal bond decisions. While the volatility of today s economy has altered the municipal bond landscape, it s important to remember that where there are challenges, there are also opportunities. Re-evaluating the role that muni bonds play in your portfolio means gaining a better understanding of what your options are in this current environment. UBS offers you sophisticated municipal marketplace capabilities that include access to best-in-class research, seamless execution, and management and monitoring of your holdings. You ll benefit from the expertise of our UBS Municipal Trading and Portfolio Specialist Group and you ll have access to the broadest array of products in the primary and secondary markets. The role that muni bonds play in your future depends on the advice you receive today. And there s no firm better positioned to help you meet your unique investment needs than UBS. Expert advice to help you navigate today s muni market What truly distinguishes UBS in the municipal bond marketplace is our UBS Municipal Trading and Portfolio Specialist Group. This dedicated team of municipal debt experts includes regional specialists, traders, a specialty high yield trading desk and credit analysts who focus on virtually every aspect of the municipal marketplace, including underwriting and institutional portfolio management. By offering you a regional credit perspective and market expertise, the UBS Municipal Trading and Portfolio Specialist Group can customize municipal solutions based on your individual needs. Working together with your Financial Advisor, this team provides: Customized proposals that meet your investment objectives, risk profile and time horizon Strategic planning and investment guidance that address your specific needs, such as income or liquidity Continuous review and analysis of your investments throughout the life of your portfolio An open architecture platform opens up new opportunities for you UBS is committed to an open architecture platform, which enables you to select from a broader universe of products and not just what s on the shelf. Your Financial Advisor can access the primary market through UBS s competitive new issue underwriting desk. You ll have the flexibility to purchase negotiated new issues through our strategic alliances with partners that include J.P. Morgan s Investment Bank, Loop Capital Markets and Seattle Northwest Securities Corporation. UBS also offers access to a wide-ranging proprietary and external inventory of muni bonds through regional trading desks located in Chicago, Dallas, Los Angeles, New York

3 and Orlando. These regional trading desks maintain an extensive proprietary secondary inventory, as well as providing you with external secondary municipal offerings via the BondDesk platform. Advanced portfolio analytics and seasoned professionals give you the full picture Our advanced portfolio analytics provide a comprehensive picture of your fixed income holdings, from municipals to taxable securities. From your projected annual income to your underlying credit ratings, you ll have all the information you need right at your fingertips. But our advice doesn t end with sophisticated analytics. Our regional specialists can draw on a host of in-house professionals, including municipal traders and dedicated research analysts, to provide observations and recommendations tailored to fit your unique needs. Even after an investment strategy has been implemented, our specialists remain involved in ongoing portfolio reviews, partnering with your Financial Advisor to ensure your strategies remain aligned with your objectives. Best-in-class research that uncovers the catalysts behind the trends By having access to timely research, you ll be in a better position to make well-informed investment decisions. Our elite, independent research team Wealth Management Research uses its insight and knowledge to uncover the catalysts behind the trends in the financial marketplace and discuss how they can impact your investments. A dedicated team of municipal credit analysts provides well-timed credit insights and in-depth analysis of individual issuers. If you have more questions about your investment strategy or a specific sector, your Financial Advisor can work with a portfolio specialist to access a Wealth Management Research credit analyst to fill in the missing pieces. The flexibility to manage your portfolio on your terms If you prefer to work closely with your Financial Advisor to make each investment decision, then you may want to consider a traditional transaction-based account. UBS provides a service that offers your Financial Advisor direct access to Moody s Investors Service, which includes coverage of 23,000 public finance issuers. So you ll be able to tap into a powerful resource that provides you with credit opinions, new issue announcements and rating updates at the instrument level. Or if you d prefer to have someone else build your municipal bond portfolio, then you should consider professional management, available through separately managed accounts and mutual funds.

4 Municipal bonds have provided investors a source of stability over the years. While the municipal bond market faces new challenges today, historically its default rates have been low. In fact, muni bonds are 10 to 20 times less likely to default than corporate bonds with identical ratings. Default rates on municipal debt historically have been well below those within the investment-grade universe Municipal debt is far less likely to default than corporate bonds with identical ratings 5% 4% 4.2% 10% 8% 8.1% 3% 6% 2% 4% 3.3% 1% 0 0.2% Municipal U.S. Corporate 2% 0 0.0% 0.7% AAA Municipal 1.2% AA A BBB U.S. Corporate Source: S&P default rates, municipal vs. U.S. investment-grade corporate (15-year cumulative average default rates). S&P, U.S. Municipal Rating Transitions and Defaults, ; Annual Global Corporate Default Study and Rating Transitions, U.S. corporate default rates are shown for ; municipal rates are for Source: S&P default rates, municipal vs. U.S. corporate (15-year cumulative average default rates). S&P, U.S. Municipal Rating Transitions and Defaults, ; Annual Global Corporate Default Study and Rating Transitions, U.S. corporate default rates are shown for ; municipal rates are for

5 A multi-tiered approach designed to help you get the most from your municipal bond investments. Access to an open architecture platform Expertise from regional municipal portfolio specialists and traders Reporting through advanced portfolio analytics Research provided by Wealth Management Research credit analysts dedicated to your overall wealth management goals Advice you can trust starts with a conversation. Let s discuss a strategy to put my muni bond experience to work for you. Important information about brokerage and advisory services It is important that you understand the ways in which UBS Financial Services Inc. (UBS) conducts business and the applicable laws and regulations that govern the Firm. As a firm providing wealth management services to clients in the U.S., UBS is registered with the U.S. Securities and Exchange Commission (SEC) as an investment adviser and a broker-dealer, offering both investment advisory and brokerage services. Though there are similarities among these services, the investment advisory programs and brokerage accounts UBS offers are separate and distinct, differ in material ways and are governed by different laws and separate contracts. It is important that you carefully read the agreements and disclosures UBS provides to you about the products or services offered. While UBS strives to ensure that these materials clearly describe the nature of the services provided, please do not hesitate to contact your Financial Advisor team, if you would like clarification on the nature of your accounts or services you receive from us. For more information, please visit our web site at ubs.com/workingwithus. Neither UBS Financial Services Inc., nor any of its employees provide tax or legal advice. You must consult with your tax and legal advisors regarding your personal circumstances. Fixed Income Risk Two main risks related to fixed income investing are interest rate risk and credit risk. Typically, when interest rates rise, there is a corresponding decline in the market value of bonds. Credit risk refers to the possibility that the issuer of the bond will not be able to make principal and interest payments UBS Financial Services Inc. All rights reserved. Member SIPC. All other trademarks, registered trademarks, service marks and registered service marks are of their respective companies. UBS Financial Services Inc. is a subsidiary of UBS AG. ubs.com/fs ab