BOND STRATEGIES * 1.03yrs 4.65yrs 2.94yrs 4.29yrs 3.98yrs A2/ A

Transcription

1 Morgan Stanley One Penn Plaza, 43rd Floor, New York, NY MUNICIPAL BOND STRATEGIES * ENHANCED CASH CORPORATE NATIONAL TAX-EXEMPT MUNICIPAL MANAGED DURATION MUNICIPAL BOND MUNICIPAL PLUS 1 FOR 1 SHORT DURATION BOND INVESTMENT GRADE CORPORATE BOND INVESTMENT GRADE FLOATING RATE BOND STRATEGIC CORPORATE BOND LIMITED DURATION HIGH YIELD CORPORATE BOND CURRENT YIELD 4.30% 3.77% 4.16% 2.84% 3.17% 1.89% 4.06% 5.25% AVG. LIFE 8.62yrs 6.87yrs 7.25yrs 1.03yrs 4.65yrs 2.94yrs 4.29yrs 3.98yrs DURATION YIELD TO MATURITY 2.72% 2.40% 2.70% 1.75% 2.54% 1.74% 3.25% 4.23% YIELD TO WORST 1.84% 1.77% 1.89% 1.75% 2.53% 1.74% 2.77% 2.84% RATINGS Aa2/ AA Aa2/ AA Aa3/ AA- A2/ A A3/ A- A2/ A Baa3/ Ba3/ BB *All information shown is representative of the data contained in the summary sheets on pages 2-7. Additional yield statistics are included for each strategy on the corresponding subsequent pages. Over time, the strategies will also likely change in terms of yield, average life, duration, and average ratings. As of 7/3/ Morgan Stanley Smith Barney LLC Member SIPC Source:

2 NATIONAL TAX-EXEMPT MUNICIPAL BOND The National Tax-Exept Municipal Bond Strategy's primary objective is to generate current income in a tax efficient manner while preserving capital. The portfolio invests along the curve in general obligation bonds issues by states and established local communities, essential service revenue bonds, and bonds issued by special tax districts. Only tax-exempt municipal issues rated A3/A or higher are considered at time of purchase. Geographic exposures are customized for clients residing in high tax jurisdictions. Utility/Water: MINIMUM INVESTMENT 50% Various Purp: 8% Education: Initial: $250,000 16% Tax Revenue: 8% General Purp: 12% Transportation: 4% INCEPTION DATE: February 1, 2010 Number of Holdings: 24 : 8.62 years Average Effective Duration: 5.42 Average Aa2/AA Current Yield: 4.30% Yield to Maturity: 2.72% Yield to Worst: 1.84% AUSTIN TEX ELEC 4.15% Aa3/AA CITIENS PPTY 4.13% A1/A+ DALLAS ARPT 4.09% A1/A+ DALLAS RAPID TRAN 4.13% Aa2/AA+ Credit Quality DC INCOME TAX 4.13% Aa1/AAA AAA: 17% EL PASO WTR & SWR 4.10% NA/AA+ AA: 67% HAWAII ST 4.11% Aa1/AA+ A: 16% KING CNTY WASH 3.99% Aa2/AA+ 17% KENTUCKY ECONOMIC 4.01% Aa2/AA- AAA MASS ST COLLEGE AUTH 4.25% Aa2/AA- 67% AA General Purpose/Public Imp 25% Transportation - Other 8% Water & Sewer 21% Solid Waste/Recovery 4% University / Higher Educ 13% Mass/Rapid Transit 4% Power 13% Portfolio Composition Revenue: 83% G.O.: 17% 17% G.O. 83% Revenue

3 MANAGED DURATION MUNICIPAL BOND The Managed Duration National Municipal Bond Strategy s primary objective is to generate a high level of current income while preserving capital. The portfolio invests in tax-exempt municipal bonds, including both general obligation and essential service revenue bonds rated A3/A or better at time of purchase. The portfolio will also invest in taxable investment grade corporate floating rate bonds designed to provide a partial interest rate hedge as coupons fluctuate based off movements in LIBOR. The target allocation within the portfolio is 80% municipals and 20% corporate bonds. The municipal holdings within the portfolio can SECTOR be customized BREAKDOWN: for clients residing in high tax jurisdictions. Education: 16% Tax Revenue: 8% General MINIMUM Purp: INVESTMENT 12% Transportation: 4% Initial: $250,000 INCEPTION DATE: July 1, 2015 Number of Holdings years Average Effective Duration 4.09 Average Credit Quality Aa2/AA Current Yield 3.77% Yield to Maturity 2.40% Yield to Worst 1.77% DALLAS ARPT 5.11% A1/A+ DC INCOME 5.12% Aa1/AAA HAWAII ST 5.08% Aa1/AA+ KING CNTY WASH 4.94% Aa2/AA+ MASSACHUSETTS ST 5.35% A1/AA- METROPOLITAN TRANS 5.09% A2/A+ NC ST CAP 5.25% Aa2/AA NEW JERSEY ST TPK 5.29% Aa2/AA PALM BEACH WASTE 5.04% Aa1/AAA TEXAS ST 5.02% Aaa/AAA Revenue Bonds 57% General Oblig 20% Corporate Credit 23% Portfolio Composition Tax-Exempt Munis: 77% IG Floating Rate Note: 23% Credit Quality AAA: 20% AA: 55% A: 17% : 8% 23% IG Floating Rate Note 77% Tax-Exempt Munis 20% AAA 55% AA

4 MUNICIPAL PLUS The Municipal Plus Strategy's primary objective is to gernate a high level of current income while preserving capital. The portfolio invests in tax-exempt municipal bonds, including both general obligation and essential service revenue bonds rated A3/A or better at time of purchase. The portfolio will also invest in high yield corporate bonds rated B2/B or higher at time of purchase, as well as investement grade corporate floating rate bonds. The target allocation within the portfolio is 80% municipals and 20% corporate bonds. The municipal holdings within the portfolio can be customized for clients residing in high tax jurisdictions. Education: MINIMUM INVESTMENT 16% Tax Revenue: 8% General Purp: 12% Transportation: 4% Initial: $250,000 INCEPTION DATE: February 1, 2012 Number of Holdings: 44 : 7.25 years Average Effective Duration: 4.30 Average Aa3/AA- Current Yield: 4.16% Yield to Maturity: 2.70% Yield to Worst: 1.89% CITIENS PPTY FLA 5.25% A1/A+ DC INCOME 5.25% Aa1/AAA HAWAII ST 5.21% Aa1/AA+ KING CNTY WASH 5.07% Aa2/AA+ METRO TRANSN NY 5.49% A1/AA- NEW JERSEY ST TPK 5.22% A2/A+ SAN ANTONIO WTR 5.38% Aa2/AA SEATTLE WASH PWR 5.42% Aa2/AA TAMPA WTR & SWR 5.17% Aa1/AAA TEXAS ST 5.15% Aaa/AAA Revenue Bonds 58% General Oblig 21% Corporate Credit 21% Portfolio Composition: Tax-Exempt Munis: 79% High Yield Corporates: 10% IG Floating Rate Notes: 11% 10% High Yield Corporates AAA, AA, A: 86% : 4% BB, B: 10% 11% IG Floating Rate Notes 10% BB, B 79% Tax-Exempt Munis 86% AAA, AA, A

5 1 FOR 1 SHORT DURATION BOND The 1 for 1 Short Duration Bond Strategy has a primary objective of preservation of principal along with a secondary goal of income generation. The portfolio invests exclusively in investment grade corporate bonds and U.S. Treasury and Agency securities. The portfolio is expected to maintain a weighted average maturity of approximately 1 year. MINIMUM Education: INVESTMENT 16% Tax Revenue: 8% General Purp: 12% Transportation: 4% Initial: $250,000 IRA Initial: $250,000 INCEPTION DATE: October 1, 2015 Number of Holdings years Average Effective Duration 0.95 Average Credit Quality A2/A Current Yield 2.84% Yield to Maturity 1.75% Yield to Worst 1.75% AETNA 2.57% Baa2/A ANTHEM 2.58% Baa2/A AMERICAN EXPRESS 2.69% A3/+ COMCAST 2.68% A3/A- FORD 2.65% Baa2/ GENERAL MOTORS 2.60% Baa3/ KRAFT HEIN 2.57% Baa3/- SHELL 2.58% Aa2/A UNITEDHEALTH 2.66% A3/A+ VERION COMMS 2.57% Baa1/+ Portfolio Composition Inv Grade Corp 86% US Agency 14% Maturity Breakdown: 0-6 Months: 5% 6-12 Months: 52% Months: 43% AA: 19% A: 42% : 39% 43% Months 42% A 19% AA 52% 6 12 Months 39%

6 INVESTMENT GRADE CORPORATE BOND The Investment Grade Corporate Bond Strategy seeks to provide a stable and sustainable level of current income with a secondary goal of capital appreciaton. The portfolio is invested in domestic and international high quality investment grade corporate bonds and will target a 30% allocation to investment grade corporate floating rate bonds. The portfolio is expected to maintain a weighted average maturity of 3-7 years. All holdings are $US denominated. MINIMUM Education: INVESTMENT 16% Tax Revenue: 8% General Purp: 12% Transportation: 4% Initial: $250,000 IRA Initial: $250,000 INCEPTION DATE: October 1, 2009 Number of Holdings years Average Effective Duration 3.18 Average Credit Quality A3/A- Current Yield 3.17% Yield to Maturity 2.54% Yield to Worst 2.53% ANHEUSER-BUSCH 2.89% A3/A- AMGEN 2.94% Baa1/A ANADARKO PETRO 3.03% Ba1/ BP 3.35% A1/A- HP 3.01% Baa2/ ALTRIA GROUP 2.85% A3/A- PRUDENTIAL 3.09% Baa1/A SHELL 2.78% Aa2/A TD BANK 3.33% Aa1/AA- VALERO ENERGY 3.10% Baa2/ Banking 20% Diversified Telecom 6% Pharmaceuticals 12% Integrated Oil 6% Life Insurance 9% Electronics 6% Portfolio Composition: Inv. Grade Corp: 71% IG Floating Rate Notes: 29% AA: 9% A: 42% : 49% 29% IG Floating Rate Notes 42% A 71% Inv. Grade Corp. 49%

7 INVESTMENT GRADE FLOATING RATE BOND The Investment Grade Floating Rate Bond Strategies primary objective is to generate current income while preserving capital in a rising rate environment. Portfolio will be actively managed to take advantage of total return opportunities within the corporate bond market. The Portfolio will invest in Investment Grade bonds with floating rate coupons rated Baa3/- or higher at time of purchase. MINIMUM Education: INVESTMENT 16% Tax Revenue: 8% General Purp: 12% Transportation: 4% Initial: $250,000 IRA Initial: $250,000 INCEPTION DATE: October 1, 2016 Number of Holdings years Average Effective Duration 0.15 Average Credit Quality A2/A Current Yield 1.89% Yield to Maturity 1.74% Yield to Worst 1.74% AMERICAN EXPRESS 3.68% A2/A- CITIGROUP INC 3.69% Baa1/+ CATERPILLAR 3.69% A3/A JOHN DEERE 3.68% A2/A HONDA 3.71% A1/A+ JPMORGAN CHASE 3.69% A3/A- MERCK & CO INC 3.70% A1/AA ORACLE CORP 3.71% A1/AA- PEPSICO INC 3.71% A1/A+ SHELL 3.68% Aa2/A Banks 22% Telecom 7% Energy 19% Machinery 7% Manufacturing 11% Beverage 4% Electronics 11% Maturity Breakdown: 0-2 Years: 30% 2-5 Years: 63% 5-7 Years: 7% AA: 30% A: 44% : 26% 30% 0-2 Years 7% 5 7 Years 30% AA 26% 63% 2 5 Years 44% A

8 STRATEGIC CORPORATE BOND The Strategic Corporate Bond Strategy s primary objective is to seek current income with a secondary goal of capital appreciation. The portfolio is primarily invested in investment grade and high yield corporate bonds rated B2/B or higher at the time of purchase. The portfolio will target no more than 50% to bonds rated below Baa3/-. The portfolio will also invest in investment grade corporate floating rate bonds. Maximum industry sector concentration of 30%. All holdings are US$ denominated. MINIMUM INVESTMENT Education: 16% Tax Revenue: 8% Initial: General $250,000 Purp: 12% IRA Transportation: Initial: $250,000 4% INCEPTION DATE: August 1, 2010 Number of Holdings years Average Effective Duration 2.45 Average Credit Quality Baa3/ Current Yield 4.06% Yield to Maturity 3.25% Yield to Worst 2.77% ANHEUSER-BUSCH 1.67% Baa3/ ALLEGIANT TRAVEL 1.68% B1/BB- CVS 1.66% Baa1/+ DUKE ENERGY 1.70% Baa1/+ GM 1.65% Baa3/ ICAHN LP 1.68% Ba3/BB+ KINROSS GOLD 1.72% Ba1/BB+ L BRANDS INC 1.73% Ba1/BB+ LIFEPOINT HEALTH 1.69% Ba2/BB- ORBITAL ATK 1.68% Ba3/BB Banking 11% Health Care Facilities 5% Electronics 9% Life Insurance 5% Pharmaceuticals 7% Finance - Other 4% Retail Stores 5% Portfolio Composition: High Yield Corp: 46% Inv. Grade Corp: 38% IG Floating Rate Notes: 16% AAA, AA, A: 29% : 33% BB, B: 38% 16% IG Floating Rate Notes 38% Inv. Grade Corp. 33% 29% AAA, AA, A 46% High Yield Corp. 38% BB, B

9 LIMITED DURATION HIGH YIELD CORPORATE BOND The Limited Duration High Yield Corporate Bond Strategy seeks to provide a high level of current income by investing in a diversified portfolio of high yield corporate bonds with an average credit rating of Ba3/BB and no bonds rated below B2/B at time of purchase. The strategy's secondary objective of total return is pursued by investing in high quality securities that offer the opportunity for price appreciation. The fund is benchmarked against the Citigroup High Yield Market Index (avg. life 5 years or less). Maximum industry sector concentration of 30%. All holdings are US$ denominated. MINIMUM INVESTMENT Education: 16% Tax Revenue: 8% Initial: General $250,000 Purp: 12% IRA Transportation: Initial: $250,000 4% INCEPTION DATE: February 1, 2010 Number of Holdings years Average Effective Duration 1.47 Average Credit Quality Ba3/BB Current Yield 5.25% Yield to Maturity 4.23% Yield to Worst 2.84% ANIXTER INC 4.06% Ba3/BB DANA INC 4.00% B1/BB DOLLAR TREE INC 3.95% Ba2/BB JABIL CIRCUIT INC 4.11% Ba1/- LIFEPOINT HEALTH INC 3.98% Ba2/BB- NUSTAR LOGISTICS LP 4.15% Ba1/BB+ RR DONNELLEY & SONS CO 4.21% B2/B+ SBA COMMS CORP 3.97% B3/B+ SVC CORP INTL 3.96% Ba3/BB SILGAN HLDGS INC 3.96% Ba3/BB- Electronics 12% Publishing 4% Health Care Facilities 12% Gas Pipelines 4% Retail Stores 8% Airlines 4% Metals/Mining 8% Service 4% Maturity Breakdown: 0-3 Years: 16% 3-5 Years: 68% 5-7 Years: 16% : 12% BB: 76% B: 12% 68% 3 5 Years 12% 12% B 76% BB

10 Morgan Stanley One Penn Plaza, 43rd Floor, New York, NY Scott McCoy, Managing Director - Wealth Management/Senior Portfolio Management Director, Corporate Cash Investment Director, International Client Advisor, National Strategic Partner, Financial Advisor is a member of Morgan Stanley s 2016 Chairman s Club. He also holds the title of Portfolio Manager and brings over 20 years of fixed income experience to The Tribeca Group s clients. Before joining the firm in 2008, Scott was a Senior Managing Director and institutional fixed income salesperson in the Middle Markets Group at Bear Stearns. There, he served the fixed income needs of depository institutions, money managers, insurance companies, and hedge funds. Prior to that, he traded government bonds at Citicorp Securities where he was responsible for the short coupon sector. A graduate of Holy Cross College, Scott holds a J.D. from St. John's University and an M.B.A. from New York University. Jordan Eisenberg, CFA, Executive Director - Wealth Management/Senior Portfolio Management Director, is a member of Morgan Stanley s 2016 President s Club. He brings over 10 years of fixed income experience to The Tribeca Group s clients. Before joining the firm, Jordan was an Associate Director at Bear Stearns, where he helped institutional clients develop fixed income strategies utilizing high yield and investment grade corporate bonds, as well as interest rate products including treasuries and mortgage-backed securities. He holds the Chartered Financial Analyst designation, and is a member of the CFA Institute and the New York Society of Security Analysts. Jordan is a graduate of the University of Florida where he received a B.S. in Business Administration. Yunjin Lee, CFA, CMA, Associate Vice President Wealth Management, Financial Advisor at Morgan Stanley, focused on providing in-depth fundamental and technical analysis of investment grade and high yield bonds. Yunjin researches outside money managers whom we might recommend for various components of your portfolio. Yunjin joined Morgan Stanley in 2009 after working in Barclay Capital s High Yield Credit Corporate Department as a trading desk and publishing analyst. Prior to that, she served as a strategy consultant at Bain & Co. She holds the Chartered Financial Analyst designation and is a member of the CFA institute and the New York Society of Security Analysts. A graduate of Korea University, Yunjin received an M.B.A. from the Wharton School of the University of Pennsylvania. William M. Wilson is a Portfolio Management Associate with over 5 years of fixed income experience. He works closely with Portfolio Managers in executing The Tribeca Groups municipal strategy in the areas of trading, portfolio analytics, and market data/research. In addition, he provides institutional clients with information on primary market offerings and trade execution. Prior to joining The Tribeca Group, William was a Vice-President at Roosevelt & Cross, Inc., actively managing a municipal inventory consisting of a wide array of credits, providing liquidity for institutional customers, and developing trading strategies. He is a graduate of the Boston University Questrom School of Business where he received a B.S. in Business Administration and currently holds Series 7, 52, 53, 63 and 66 registrations. Michael Clark is a Financial Advisor at Morgan Stanley. Michael has over 30 years experience in the financial services industry, working as a regional representative for asset management companies including Smith Barney/Citigroup Asset Management, Legg Mason, and Eaton Vance Distributors. In joining the Tribeca Group in 2015, Michael is responsible for managing the relationship between the Tribeca Group and the other Financial Advisors at Morgan Stanley. He earned a BA in Economics from UCLA and currently holds series 7, 63, and 65 registrations. Tom Santagato is a Wealth Advisory Associate focused on enhancing relationships between the Tribeca Group and its Partner Financial Advisors. Prior to joining the Tribeca Group, he was a member of a $5 billion Corporate Cash Management team at Oppenheimer & Co. Tom is a 2007 graduate of Springfield College where he earned a B.S. in Education and was a member of the lacrosse team. While competing on the U.S. Skeleton National Team, he took classes toward an M.B.A. in Finance and graduated with distinction in He currently holds Series 7 and 66 registrations. Melissa Harrington is a Portfolio Associate with 25 years of financial services industry experience, joining the Tribeca Group in In this role, she works to help facilitate client service, trade settlement, account maintenance, and marketing. Prior to joining the Tribeca Group, Melissa was a separate account product wholesaler with Northern Trust and Wilmington Trust. Melissa attended High Point College in High Point North Carolina, majoring in Economics. She currently holds Series 7and Series 63 registrations. Austin Cremins is a Senior Client Service Associate at Morgan Stanley focused on providing important assistance to our Portfolio Managers in the areas of portfolio analytics, market data tracking, and reporting services. Before joining the firm Austin worked at Societe Generale advising clients on raising capital within the US Private Placements market. Austin is a graduate of Western Kentucky University with a B.S. in Finance. *The portfolio managers are members of the MorganStanley Portfolio Management Group. Since 1979, the Portfolio Management Group has been creating customized investment strategies for high net worth individuals and institutional investors. Our portfolio managers are a select group of Financial Advisors who are qualified to independently manage client assets based on training, experience and **Citigroup High Yield Market Credit Index is a standard market index consisting of issues with an average life of 7 years or less. Source:

11 DISCLOSURES: Asset Allocation and diversification does not guarantee a profit or protect against a loss. Bonds are subject to interest rate risk. When interest rates rise, bond prices fall; generally the longer a bond s maturity, the more sensitive it is to this risk. Bonds may also be subject to call risk, which is the risk that the issuer will redeem the debt at its option, fully or partially, before the scheduled maturity date. The market value of debt instruments may fluctuate, and proceeds from sales prior to maturity may be more or less than the amount originally invested or the maturity value due to changes in market conditions or changes in the credit quality of the issuer. Bonds are subject to the credit risk of the issuer. This is the risk that the issuer might be unable to make interest and/or principal payments on a timely basis. Bonds are also subject to reinvestment risk, which is the risk that principal and/or interest payments from a given investment may be reinvested at a lower interest rate. Bonds rated below investment grade may have speculative characteristics and present significant risks beyond those of other securities, including greater credit risk and price volatility in the secondary market. Investors should be careful to consider these risks alongside their individual circumstances, objectives and risk tolerance before investing in high-yield bonds. High yield bonds should comprise only a limited portion of a balanced portfolio. The individuals mentioned as the Portfolio Management Team are Financial Advisors with Morgan Stanley participating in the Morgan Stanley Portfolio Management program. The Portfolio Management program is an investment advisory program in which the client s Financial Advisor invests the client s assets on a discretionary basis in a range of securities. The Portfolio Management program is described in the applicable Morgan Stanley ADV Part 2, available at stanley.com/adv or from your Financial Advisor. This material is intended only for clients and prospective clients of the Portfolio Management program. It has been prepared solely for informational purposes only and is not an offer to buy or sell or a solicitation of any offer to buy or sell any security or other financial instrument, or to participate in any trading strategy. This material does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The strategies and/or investments discussed in this material may not be suitable for all investors. Morgan Stanley Smith Barney LLC recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a Financial Advisor. The appropriateness of a particular investment strategy will depend on an investor s individual circumstances and objectives. Holdings are subject to change daily, so any securities discussed in this profile may or may not be included in your account if you invest in this investment strategy. Do not assume that any holdings mentioned were, or will be profitable. The performance, holdings, sector weightings, portfolio traits and other data for an actual account may differ from that in this material due to various factors including the size of an account, cash flows within an account, and restrictions on an account. Top holdings, sector allocation, portfolio statistics and credit quality are based on the recommended portfolio for new investors as of the date specified. Holdings lists indicate the largest security holdings by allocation weight as of the specified date. Other data in this material is believed to be accurate as of the date this material was prepared unless stated otherwise. Data in this material may be calculated by Morgan Stanley or by third party providers licensed by the Financial Advisors or Morgan Stanley. Morgan Stanley Wealth Management has no obligation to notify you when information in this presentation changes. Tax laws are complex and subject to change. Morgan Stanley Smith Barney LLC ( Morgan Stanley ), its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors do not provide tax or legal advice and are not fiduciaries (under the Internal Revenue Code or otherwise) with respect to the services or activities described herein except as otherwise agreed to in writing by Morgan Stanley. This material was not intended or written to be used for the purpose of avoiding tax penalties that may be imposed on the taxpayer. Individuals are encouraged to consult their tax and legal advisors regarding any potential tax and related consequences of any investments made under such account Morgan Stanley Smith Barney LLC Member SIPC As of 5/30/14 CRC # November 2016 *The portfolio managers are members of the MorganStanley Portfolio Management Group. Since 1979, the Portfolio Management Group has been creating customized investment strategies for high net worth individuals and institutional investors. Our portfolio managers are a select group of Financial Advisors who are qualified to independently manage client assets based on training, experience and **Citigroup High Yield Market Credit Index is a standard market index consisting of issues with an average life of 7 years or less. Source: