In 1913, the 16th Amendment to the Constitution made income tax a permanent fixture in the US tax system. Since then, Uncle Sam has been a silent partner in every investment made by US investors, and has felt like a majority shareholder for high net worth investors. Our active tax-exempt fixed income strategies begin with an analysis of each client's tax rate and then are monitored on a continual basis. We also employ a crossover strategy that actively measures the tax-adjusted yield value of municipals versus comparable US Treasuries and other taxable instruments. We will invest in taxable issues when they offer superior returns over municipals. We customize each portfolio to match our clients' goals and expectations with quality fixed income. High quality fixed income gives our clients liquidity, stable income, and principal protection. Essentially, we construct a "sleep-well-at-night" portfolio tailored to each client's needs. These actively managed accounts are designed either as stand-alone portfolios or as overlays to an existing equity portfolio managed at SAC.

Limited Duration Municipal

OBJECTIVES

• Seeks to provide after-tax stable income and principal protection on a risk-adjusted total return basis vs. the relevant composite benchmark
• Separately managed to a client's tax requirements and specific cash-flow needs combined with an allowance to take moderate credit and maturity risk for yield enhancement purposes
• Provides the highest degree of liquidity with an asset allocation heavily weighted in short-term, investment-grade fixed income securities

INVESTMENT PHILOSOPHY

• Utilizes a disciplined Investment Selection Committee comprised of senior portfolio managers and research analysts
• Asset allocation is driven by a two-tier approach: a 'top-down' view of global markets followed by SAC's qualitative and quantitative 'bottom-up' approach
• Top-down duration is actively managed following current interest rate trends along with a client's objectives to pinpoint those sectors and maturities that provide the best investment opportunities
• Bottom-up individual security selection is utilized by senior portfolio managers based on relative value, credit-worthiness, and potential price and income appreciation of a particular sector and index in the context of our top-down view
• Portfolios are then adjusted accordingly within the constraints of individual client's requirements

INVESTMENT PROCESS

• The strategy first looks at a each client's tax rate as an integral starting point, which is monitored on a continual basis
• We then employ a crossover strategy that actively measures the tax-adjusted yield value of municipals versus comparable Treasuries or other taxable instruments
• We will invest in taxable issues when they offer superior returns over municipal investments
• We customize and separately manage each portfolio so we can meet a client's individual goals, risk tolerance, and liquidity and tax requirements
• Portfolio duration is maintained within a +/-25% band around the corresponding benchmark to minimize market volatility within a client's portfolio