Guggenheim Build America Bonds Managed Duration Trust Announces Modifications to Certain Non-Fundamental Investment Policies ...
May 20 2016 - 4:30PM
Guggenheim Build America Bonds Managed Duration Trust (“GBAB” or
the “Trust”) today announced that the Trust’s Board of Trustees
(the “Board”) approved modifications to certain non-fundamental
investment policies and the name of the Trust, which will become
effective as of July 26, 2016.
The Trust will continue to pursue its primary investment
objective of providing current income with a secondary objective of
long-term capital appreciation. However, as a result of these
investment policy changes, the Trust will no longer be required to
invest a specific percentage of its Managed Assets in Build America
Bonds (“BABs”).
Current Policy |
New Policy (Effective July 26, 2016) |
Under normal market conditions, the Trust will invest at least 80%
of its Managed Assets in BABs. |
Under normal market conditions, the Trust will invest at least 80%
of its Managed Assets in taxable municipal securities, including
BABs. |
Under normal market conditions, the Trust may invest up to 20% of
Managed Assets in securities other than BABs, including taxable
municipal securities that do not qualify for federal subsidy
payments under the American Reinvestment and Recovery Act,
municipal securities the interest income from which is exempt from
regular federal income tax (sometimes referred to as “tax-exempt
municipal securities”), asset-backed securities, senior loans and
other income producing securities. |
Under normal market conditions, the Trust may invest up to 20% of
its Managed Assets in securities other than taxable municipal
securities, including tax-exempt municipal securities, asset-backed
securities, senior loans and other income producing
securities. |
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In connection with the investment policy changes described
herein, the Trust will be required to change its name. Upon the
effective date, the Trust will change its name to “Guggenheim
Taxable Municipal Managed Duration Trust”. The Trust will continue
to trade on the NYSE under its current ticker symbol, “GBAB”.
Given the uncertainty around the continuation of the BABs
program at the time of the Trust’s commencement of operations in
2010, the Trust’s initial public offering prospectus stated that if
the BABs program was not extended and there ceased to be new
issuances of BABs or other taxable municipal securities with
interest payments subsidized by the U.S. Government through direct
pay subsidies, the Board of Trustees intended to evaluate potential
actions with respect to the Trust, which could include, among other
things, changes to the non-fundamental investment policies of the
Trust to permit the Trust to broaden its investment focus, for
example to taxable municipal securities generally, merger of the
Trust into another fund or termination of the Trust.
Given that there have been no new issuances of BABs, the
investment policy changes described herein reflect the Board’s
evaluation of the Trust pursuant to its prospectus. The Trust
believes that these investment policy changes are appropriate at
this time to potentially diversify the Trust’s portfolio by
broadening its investment universe and providing portfolio
management flexibility to take advantage of relative value
opportunities in the taxable municipal market as a whole.
No other changes to the Trust’s other investment policies or the
Trust’s portfolio management team are currently anticipated, nor is
it currently anticipated that there will be substantial portfolio
turnover in conjunction with these changes in the immediate
future.
No action is required by shareholders of the Trust in connection
with these investment policy changes.
For the most up-to-date information and a more complete
discussion of the risk considerations associated with an investment
in the Trust, please visit the Trust’s website at
guggenheiminvestments.com/GBAB.
About Guggenheim Investments
Guggenheim Investments is the global asset management and
investment advisory division of Guggenheim Partners, with $199
billion* in total assets across fixed income, equity, and
alternative strategies. We focus on the return and risk needs of
insurance companies, corporate and public pension funds, sovereign
wealth funds, endowments and foundations, consultants, wealth
managers, and high-net-worth investors. Our 275+ investment
professionals perform rigorous research to understand market trends
and identify undervalued opportunities in areas that are often
complex and underfollowed. This approach to investment management
has enabled us to deliver innovative strategies providing
diversification opportunities and attractive long-term results.
*Guggenheim Investments total asset figure is as of
03.31.2016. The assets include leverage of $11.4bn for assets under
management and $0.5bn for assets for which we provide
administrative services. Guggenheim Investments represents the
following affiliated investment management businesses: Guggenheim
Partners Investment Management, LLC, Security Investors, LLC,
Guggenheim Funds Investment Advisors, LLC, Guggenheim Funds
Distributors, LLC, Guggenheim Real Estate, LLC, Transparent Value
Advisors, LLC, GS GAMMA Advisors, LLC, Guggenheim Partners Europe
Limited, and Guggenheim Partners India Management.
This information does not represent an offer to sell securities
of the Trust and it is not soliciting an offer to buy securities of
the Trust. There can be no assurance that the Trust will achieve
its investment objectives. Investment in the Trust involves
operating expenses and fees. The net asset value of the Trust will
fluctuate with the value of the underlying securities. It is
important to note that closed-end funds trade on their market
value, not net asset value, and closed-end funds often trade at a
discount to their net asset value. The market value of fixed income
securities will change in response to interest rate changes and
market conditions among other things. In general, bond prices fall
when interest rates rise and vice versa.
Investors should consider the investment objectives and
policies, risk considerations, charges and expenses of any
investment before they invest. For this and more information visit
www.guggenheiminvestments.com.
Analyst Inquiries
William T. Korvercefs@guggenheiminvestments.com
Not FDIC-Insured | Not
Bank-Guaranteed | May Lose ValueGuggenheim Funds Distributors, LLC
(member FINRA/SIPC)
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