OVERLAND PARK, Kan.--(BUSINESS WIRE)--While taxes are unavoidable for those who earn an income, Californians now have a new way to help reduce their tax burden when investing: the Ivy California Municipal High Income Fund.
The Fund, which became effective today, uses a diversified municipal bond portfolio to seek a high level of income that is exempt from federal and California income taxes. California has some of the highest personal income tax rates in the country which, when combined with higher Federal tax income levels, result in a large overall tax bill.
“This is another way for us to meet the tax-management and diversification needs of investors in the most populous state in the country,” said Thomas W. Butch, president and CEO of Ivy Distributors, Inc.
The Fund has a targeted strategy, investing primarily in high-yield revenue bonds that are backed by dedicated sources, such as user fees or a special tax. Revenue bonds are generally higher risk than general obligation bonds, and as a result, typically offer higher yields.
According to its prospectus, the Fund invests, under normal circumstances, at least 80% of its net assets in a diversified portfolio of municipal securities that are exempt from Federal and California income taxes. It’s available for investment primarily to California residents. The Fund is managed by Michael Walls, an 18-year industry veteran who has been with the Ivy organization since 1999.
“We use an in-depth research process that emphasizes analyzing credit risk and security structure with duration management,” said Walls.
Walls also is portfolio manager of the Ivy Municipal High Income Fund and the Waddell & Reed Advisors Municipal High Income Fund.
About Ivy Investments
Ivy InvestmentsSM is a global organization recognized for inventive, actively-managed investing strategies that help investors best meet their long-term goals. It is part of an organization dating to 1937, with a time-tested investment process and an authentic and demanding culture – one that values preparedness, collaboration and accountability. These values extend from a broad internal investing capability, which reaches all major asset classes, to subadvisor partners, to the distribution team that supports advisors and clients.
Ivy Investment Management Company and Ivy Distributors, Inc. are affiliates of Waddell & Reed Financial, Inc. (NYSE: WR). Through its subsidiaries, Waddell & Reed Financial, Inc. provides investment management and financial planning services to clients throughout the U.S. The firm had approximately $86 billion in total assets under management at June 30, 2016.
Past performance is not a guarantee of future results. The value of the Fund’s shares will change, and you could lose money on your investment. Fixed income securities are subject to interest rate risk and, as such, the net asset value of the Fund may fall as interest rates rise. Investing in below-investment-grade securities may carry a greater risk of nonpayment of interest or principal than higher-rated bonds. The Fund may include a significant portion of its investments that will pay interest that is taxable under the Alternative Minimum Tax (AMT). Exempt-interest dividends the Fund pays may be subject to state and local income taxes. The portion of the dividends the Fund pays that is attributable to interest earned on U.S. government securities generally is not subject to those taxes, although distributions by the Fund to its shareholders of net realized gains on the sale of those securities are fully subject to those taxes. The municipal securities market generally, or certain municipal securities in particular, may be significantly affected by adverse political, legislative or regulatory changes or litigation at the Federal or state level. These and other risks are more fully described in the Fund’s prospectus. Not all funds or fund classes may be offered at all broker/dealers. Because the Fund invests predominantly in California municipal securities, events in California are likely to affect the Fund’s investments and its performance. As with California municipal securities, events in any of the U.S. territories, such as Puerto Rico, Guam and the U.S. Virgin Islands, where the Fund is invested may affect the Fund’s investments and its performance. These events may include economic or political policy changes, tax base erosion, constitutional limits on tax increases, budget deficits and other financial difficulties, and changes in the credit ratings assigned to municipal issuers of California or U.S. territories.
IVY INVESTMENTS℠ refers to the financial products and services offered by Ivy Distributors, Inc., a FINRA member broker dealer and the distributor of IVY FUNDS® mutual funds, and those financial products and services offered by its affiliates, including Ivy Investment Management Company, an SEC registered investment advisor.
Before investing, investors should consider carefully the investment objectives, risks, charges and expenses of a mutual fund. This and other important information is contained in the prospectus and summary prospectus, which may be obtained at www.ivyinvestments.com or from a financial advisor. Read it carefully before investing.
Diversification cannot ensure a profit or protect against loss in a declining market.