Universities like Harvard Retain AAA Ratings Amid Federal Funding Threats

Definitions

Ratings are relative and subjective and are not absolute standards of quality. An individual bond holding’s credit quality rating  does not remove market or default risk.   Credit ratings are based largely on the ratings agency’s analysis at the time of rating. The rating assigned to any particular security is not necessarily a reflection of the issuer’s current financial condition and does not necessarily reflect its assessment of the volatility of a security’s market value or of the liquidity of an investment in the security. The AAA rating is the rating agencies highest credit rating.

Spreads generally refer to the difference between two prices, rates, or yields. It's a measure of the gap between what you pay to buy something and what you can sell it for, or the difference in yields between two different investments.

Risk Considerations

There is no assurance that a portfolio will achieve its investment objective. Portfolios are subject to market risk, which is the possibility that the market values of securities owned by the portfolio will decline and that the value of portfolio shares may therefore be less than what you paid for them. Market values can change daily due to economic and other events (e.g., natural disasters, health crises, terrorism, conflicts, and social unrest) that affect markets, countries, companies or governments. It is difficult to predict the timing, duration, and potential adverse effects (e.g., portfolio liquidity) of events. Accordingly, you can lose money investing in a portfolio. Fixed-income securities are subject to the ability of an issuer to make timely principal and interest payments (credit risk), changes in interest rates (interest rate risk), the creditworthiness of the issuer and general market liquidity (market risk). In a rising interest-rate environment, bond prices may fall and may result in periods of volatility and increased portfolio redemptions. In a declining interest-rate environment, the portfolio may generate less income. Longer-term securities may be more sensitive to interest rate changes.   An imbalance in supply and demand in the municipal market may result in valuation uncertainties and  greater volatility, less liquidity, widening credit spreads and a lack of price transparency in the market.  There generally is limited public information about municipal issuers. Income from tax-exempt municipal obligations could be declared taxable because of changes in tax laws, adverse interpretations by the relevant taxing authority or the non-compliant conduct of the issuer of an obligation and may subject to the federal alternative minimum tax.

There is no guarantee that any investment strategy will work under all market conditions, and each investor should evaluate their ability to invest for the long-term, especially during periods of downturn in the market.

A separately managed account may not be appropriate for all investors. Separate accounts managed according to the particular strategy may include securities that may not necessarily track the performance of a particular index. Please consider the investment objectives, risks and fees of the Strategy carefully before investing. A minimum asset level is required. For important information about the investment managers, please refer to Form ADV Part 2.

The views and opinions and/or analysis expressed are those of the author or the investment team as of the date of preparation of this material and are subject to change at any time without notice due to market or economic conditions and may not necessarily come to pass.

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The Municipal Market Data (MMD) index is a benchmark used to track the performance of the U.S. municipal bond market. It specifically measures the interest rate of AAA-rated, uninsured general obligation bonds. This index is published by Municipal Market Data and is used by investors and traders to understand the prevailing interest rates and yields in the municipal bond market.

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