Make Your Investments a Lot Less Taxing with the Westcore Colorado Tax-Exempt Fund
Westcore Colorado Tax-Exempt Fund
Retail Class: WTCOX, Institutional Class: WICOX
Tax-sensitive? Want to reduce your tax bill? Need a quality-focused, conservative investment option to help you keep more of what you earn? Then the no-load Westcore Colorado Tax-Exempt Fund may be right for you. This Colorado municipal bond fund was created to help risk-sensitive investors keep more of their after-tax investment earnings.
The Westcore Colorado Tax-Exempt Fund focuses primarily on investment-grade quality bonds of intermediate maturity that provide federal and state tax-exempt income.
To identify attractive investments for the portfolio we thoroughly research the financial condition of various counties, public projects, school districts and taxing authorities within the state of Colorado to assess bond issuers’ ability to meet their obligations and provide a stable income stream. We construct the portfolio with bonds from many areas of the state in an effort to reduce the economic risk to the portfolio from any particular local economy within the state.
Opportunity for Attractive Yield Relative to Taxable Investments
Tax-exempt municipal bonds can offer an advantage over taxable investments, particularly for investors in higher tax brackets. For example, an investor in the Westcore Colorado Tax-Exempt Fund who is in the 48% tax bracket could potentially earn a tax-equivalent yield of 6.12%. This is significantly higher than the nominal yields of Treasury and Corporate (A-rated) index yields (as represented by the Bloomberg Barclays Single A Corporate Index and Bloomberg Barclays Treasury Index, respectively). The same holds true for investors in a lower tax bracket, such as a 29% bracket. An investor in this bracket could potentially earn a tax-equivalent yield of 4.52% by investing in the Westcore Colorado Tax-Exempt Fund, which is still higher than nominal yields of Treasury and Corporate index yields.
We Focus on Quality in the Selection of Securities
The Westcore Colorado Tax-Exempt Fund’s portfolio managers invest in high-quality, intermediate-maturity, tax-exempt municipal bonds with the goal of generating attractive income while preserving capital and decreasing volatility of portfolio returns. The portfolio managers employ a conservative investment approach and analyze the creditworthiness of each bond through a rigorous, proprietary fundamental research process. More specifically, they assess the financial strength of the issuing municipalities along with their ability to generate revenues or levy taxes in order to meet their obligations. As Colorado residents, the portfolio managers have “on the ground” access to local projects and issuers. This allows them to better evaluate a project’s long-term prospects for success. The portfolio managers seek to construct a portfolio through a bottom-up bond selection process. They select bonds from many areas of the state in an effort to reduce the economic risk to the portfolio from any particular local economy within the state. From a top-down perspective, the portfolio managers carefully manage interest rate risk to control price volatility.
Locally Managed by Experienced
Portfolio Management Team
The Fund’s investment manager, Denver Investments, brings nearly 60 years of experience to the Westcore Colorado Tax-Exempt Fund. The firm’s experience managing fixed income assets for large institutional clients, its consistently applied investment approach, and its extensive investment expertise in Colorado municipal securities all help in assembling a portfolio of low-risk, double tax-exempt bonds. The Fund’s portfolio managers, Ken Harris, CFA, and Nicholas Foley have a combined 43 years of municipal bond investing expertise. They are backed by Denver Investments’ entire Fixed Income team.
We believe that an emphasis on income and security selection rather than market timing of interest rates is the best way to consistently deliver strong risk-adjusted returns for our clients. – Kenneth A. Harris, CFA
Kenneth A. Harris, CFA
Partner, Director of Fixed Income Portfolio Management, Portfolio Manager
Nicholas J. Foley
Vice President, Portfolio Manager, Municipal Credit Analyst/Trader
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The Westcore Colorado Tax-Exempt Fund invests primarily in instruments issued by or on behalf of one state and generally will be more volatile and loss of principal could be greater due to state specific risk.
This material is not intended to be tax advice. The tax consequences may vary by individual taxpayer. Please consult your tax professional or financial advisor for more information with regard to your specific situation.
A portion of income may be subject to the alternative minimum tax. Income earned by non-Colorado residents will be subject to applicable state and local taxes.
The performance data quoted represents past performance and does not guarantee future results. Current performance may be lower or higher than the performance data quoted. Investment return and principal value will vary, and shares, when redeemed, may be worth more or less than their original cost. To obtain current performance as of the most recent month-end, please call 800.392.CORE (2673) or visit the Performance tab.
Quotations of yield reflect all fee waivers and/or expense reimbursements. Without the absorption of these fee waivers and/or expense reimbursements, the figures quoted would have been lower. The 30-Day SEC Yield for the period noted would have been as follows for the Westcore Colorado Tax-Exempt Fund: retail: 2.66%, institutional: 2.85%.
The Bloomberg Barclays A Corporate Index is the A component of the U.S. Credit index and includes investment grade (Moody’s Investor Services Aaa to Baa, Standard and Poor’s Corporation AAA to BBB), publicly issued U.S. corporate and specified bonds.
The Bloomberg Barclays Treasury Index includes public obligations of the U.S. Treasury with a remaining maturity of one year or more.
Source: Lipper, Inc. The Best Fixed Income—Small Fund Group award is granted to the fund family with the lowest average decile ranking for Consistent Return over the 3-year period. To qualify, a fund family must have at least three fixed income funds and less than $63.5 billion in assets under management for 2016. Westcore Funds Funds ranked 1 out of 74 eligible companies for 2016.
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Lipper, a wholly owned subsidiary of Thomson Reuters, is a leading global provider of mutual fund information and analysis to fund companies, financial intermediaries and media organizations.
The Morningstar Rating for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed end funds, and separate accounts) with at least a three-year history. Exchange–traded funds and open ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-,five-,and 10 year (if applicable) Morningstar Rating metrics. The weights are 100% three-year rating for 36-59 months of total returns, 60% five year rating/40% three-year rating for 60-119 months of total returns, and 50% 10 year rating/30% five-year rating/20% three year rating for 120 or more months of total returns. While the 10 year overall rating formula seems to give the most weight to the 10 year period, the most recent three–year period actually has the greatest impact because it is included in all three rating periods.
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RISKS: Westcore Fixed Income Funds are subject to additional risk in that they may invest in high-yield/high-risk bonds and is subject to greater levels of liquidity risk. In addition, the exposure these funds have to foreign markets can regularly affect the net asset value (NAV) and total return of this Fund due to foreign risk.
An investor should consider investment objectives, risks, charges and expenses of the Fund(s) carefully before investing. Click here for a prospectus, which contains this and other important information. Please read the prospectus carefully before investing.
Westcore Funds are distributed by ALPS Distributors, Inc.
The mountain logo together with “Westcore Funds Denver Investments” is a registered service mark of Denver Investments.