BlackRock’s fixed income SMAs

Explore BlackRock’s full platform of fixed income SMAs to address your clients’ needs.

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Municipal fixed income

Active:

Short-Term Municipal Fact Sheet Sample Portfolio GIPS Composite Report
Intermediate Municipal Fact Sheet Sample Portfolio GIPS Composite Report
Long-Term Municipal Fact Sheet Sample Portfolio GIPS Composite Report
Municipal Opportunities Fact Sheet Sample Portfolio GIPS Composite Report

Laddered:

Municipal Ladder 1-5 year Fact Sheet Sample Portfolio GIPS Composite Report
Municipal Ladder 1-10 year Fact Sheet Sample Portfolio GIPS Composite Report
Municipal Ladder 5-15 year Fact Sheet Sample Portfolio GIPS Composite Report
Municipal Ladder 10-20 year Fact Sheet Sample Portfolio GIPS Composite Report

A discussion on fixed income SMAs: Hear from the experts

Kevin Staub, SMA Commercial Strategy and Duane Liedl, Senior Portfolio Manager discuss fixed income SMAs and how BlackRock is partnering with advisors to help deliver personalized solutions to their clients.

[00:00:06.28] KEVIN STAUB: Welcome. Thanks for joining us. I'm Kevin Staub. And I lead our SMA commercial strategy for BlackRock's US Wealth business. I'm joined today by Duane Liedl, head fixed-income portfolio manager in the Northeast. Today, we're going to take you through BlackRock's SMA platform. And we're going to spend some time talking about the benefits of the fixed-income SMA wrapper, as well as some of the use cases that advisors and clients are partnering with us in us Wealth. Duane, thanks for joining us today. 
[00:00:36.20] DUANE LIEDL: Happy to be here, Kevin. Thanks for having me. 
[00:00:38.60] KEVIN STAUB: So Duane, it's clear the current UN environment is presenting vast opportunities in fixed income, and particularly against prior years. When I tend to think about the SMA structure, I typically think about the security ownership. But can you share why that's important and any other attributes about the SMA structure that make an attractive vehicle for the clients that you're working with? 
[00:01:02.20] DUANE LIEDL: I think when you boil it down, Kevin, it really comes down to having more control, right? Control over the portfolio construction and client experience, control over tax efficiency, and the control over the cost of ownership, right? Both explicit and implicit. I think we would all agree that there's a societal shift at hand by consumers towards more unique and customized experiences. 
[00:01:26.81] Specifically, regarding SMAs, the fact that, A, the clients funds are not commingled with other investors can help limit the impact that other investors may have on your performance. And B, you're dealing with the underlying securities, which provides increased flexibility to personalize the portfolio, and in turn, better control for a more positive client experience. 
[00:01:50.10] Another area that advisors and clients want more control over is taxes, or tax efficiency, which is a very popular topic today. The SMA vehicle can provide a number of advantages for clients, from how the portfolio is initially funded and the ability to incorporate that into the strategy, to the taxation of the income that is generated, to the ability to tax lost harvest individual bonds, which was in very high demand from our clients last year, given the challenging year for fixed-income investors. 
[00:02:20.52] Last but not least, owning the individual bonds is very important to many of our clients. We call it having permanence and definition-- in other words, a set of fixed features, whether it's the bond's maturity, the coupon, the underlying credit quality of the issuer, that can be counted on to deliver for our clients, especially during periods of high market uncertainty. That's an important feature of SMAs. 
[00:02:45.46] KEVIN STAUB: Duane, I really like that-- the control for investors, the tax efficiency in several different ways, and really, that permanence in definition for clients to hold those bonds in their portfolio. I've also seen that some of the benefits compound through the advisor lens. And we like to refer to this as practice management. We still see many advisors managing bonds on their own. And more often than not, they're doing it well. 
[00:03:10.72] But those advisors are reaching out and looking for differentiated and more efficient ways of doing bonds. Some that we've worked with have found that partnering with BlackRock may alleviate the risk of sourcing individual bonds, may offer enhanced capabilities to compete for some of those complex client situations. And most importantly, it frees up the time to focus on other areas, such as business building, wealth management, or retirement planning. 
[00:03:39.59] So bringing it all together, SMAs can add value across the portfolio. And they can do so at costs that are comparable to ETFs, making them an attractive option for both advisors and their client. So thank you for joining us. If you'd like to learn more about BlackRock's fixed-income business or BlackRock's SMA platform, please contact your local representative. Thank you.

[00:00:06.28] KEVIN STAUB: Welcome. Thanks for joining us. I'm Kevin Staub. And I lead our SMA commercial strategy for BlackRock's US Wealth business. I'm joined today by Duane Liedl, head fixed-income portfolio manager in the Northeast. Today, we're going to take you through BlackRock's SMA platform. And we're going to spend some time talking about the benefits of the fixed-income SMA wrapper, as well as some of the use cases that advisors and clients are partnering with us in us Wealth. Duane, thanks for joining us today. 
[00:00:36.20] DUANE LIEDL: Happy to be here, Kevin. Thanks for having me. 
[00:00:38.60] KEVIN STAUB: So Duane, it's clear the current UN environment is presenting vast opportunities in fixed income, and particularly against prior years. When I tend to think about the SMA structure, I typically think about the security ownership. But can you share why that's important and any other attributes about the SMA structure that make an attractive vehicle for the clients that you're working with? 
[00:01:02.20] DUANE LIEDL: I think when you boil it down, Kevin, it really comes down to having more control, right? Control over the portfolio construction and client experience, control over tax efficiency, and the control over the cost of ownership, right? Both explicit and implicit. I think we would all agree that there's a societal shift at hand by consumers towards more unique and customized experiences. 
[00:01:26.81] Specifically, regarding SMAs, the fact that, A, the clients funds are not commingled with other investors can help limit the impact that other investors may have on your performance. And B, you're dealing with the underlying securities, which provides increased flexibility to personalize the portfolio, and in turn, better control for a more positive client experience. 
[00:01:50.10] Another area that advisors and clients want more control over is taxes, or tax efficiency, which is a very popular topic today. The SMA vehicle can provide a number of advantages for clients, from how the portfolio is initially funded and the ability to incorporate that into the strategy, to the taxation of the income that is generated, to the ability to tax lost harvest individual bonds, which was in very high demand from our clients last year, given the challenging year for fixed-income investors. 
[00:02:20.52] Last but not least, owning the individual bonds is very important to many of our clients. We call it having permanence and definition-- in other words, a set of fixed features, whether it's the bond's maturity, the coupon, the underlying credit quality of the issuer, that can be counted on to deliver for our clients, especially during periods of high market uncertainty. That's an important feature of SMAs. 
[00:02:45.46] KEVIN STAUB: Duane, I really like that-- the control for investors, the tax efficiency in several different ways, and really, that permanence in definition for clients to hold those bonds in their portfolio. I've also seen that some of the benefits compound through the advisor lens. And we like to refer to this as practice management. We still see many advisors managing bonds on their own. And more often than not, they're doing it well. 
[00:03:10.72] But those advisors are reaching out and looking for differentiated and more efficient ways of doing bonds. Some that we've worked with have found that partnering with BlackRock may alleviate the risk of sourcing individual bonds, may offer enhanced capabilities to compete for some of those complex client situations. And most importantly, it frees up the time to focus on other areas, such as business building, wealth management, or retirement planning. 
[00:03:39.59] So bringing it all together, SMAs can add value across the portfolio. And they can do so at costs that are comparable to ETFs, making them an attractive option for both advisors and their client. So thank you for joining us. If you'd like to learn more about BlackRock's fixed-income business or BlackRock's SMA platform, please contact your local representative. Thank you.

Why SMAs for fixed income investors?

A fixed income SMA is a portfolio of individual bonds that blends the benefits of direct ownership and institutional asset management. The unique structure of an SMA can provide benefits to both advisors and their clients.

Benefits to the client

Customization shapes
Customization
SMAs can be customized across investment characteristics, return/yield objectives and liquidity needs.
Graph
Tax-efficiency
Accounts can be funded with existing securities, customized to state of residence for munis and tax-loss harvested at the individual security level.
Coin
Low cost
SMA fees are often lower and more transparent than those of funds.

Benefits to the advisor

Clock
Capacity
Advisors that partner with a professional manager can scale investment management responsibilities and spend more time with clients.
Home
Access
With SMAs, advisors can receive institutional level tools and access in client accounts including credit research and risk management.
People
Service
Portfolio managers serve as an extension to an advisors practice, from constructing portfolios to conducting client reviews.

Why BlackRock for fixed income SMAS

BlackRock is a leader in the fixed income SMA industry, managing over $70B in client assets.1 Our platform offers a scalable process to help advisors build personalized bond portfolios for their clients.

The BlackRock SMA experience

number 1
Meet your PM2
BlackRock portfolio managers partner locally with advisors to help build, transition and manage client portfolios.
number 2
Customize beyond the ordinary
Consultative approach to working with advisors to build personalized portfolios with a focus on solving investor needs.
number 3
Transition with care
Transition bonds in-kind over a multi-year tax budget, seeking to minimize tax friction while maintaining the integrity of the portfolio.
number 4
Invest at scale
BlackRock’s allocation to new issuances allows us to purchase bonds at scale which can benefit clients through lower transaction costs.3

Scale matters when trading municipal bonds

BlackRock generally trades on the financial market to purchase bonds for clients at a larger scale, potentially benefiting investors with lower transaction costs and greater access to inventory.
municipal bonds graph

BlackRock customizes fixed income SMAs across five dimensions

BlackRock fixed income SMAs offer a range of enhanced customization capabilities seeking to deliver personalized solutions for advisors and their clients.
5 step personalization graph

FAQ's

  • Not all bonds are created equal. Some of the key differences between municipal and taxable bonds include the issuer and type of projects that will be funded, risk profile, yields and tax implications. It is important to consider the potential benefits and risks of each when deciding the best option for your specific situation. 

  • Taxes vary according to the type of bond you own. Tax-equivalent yield is the return calculation that puts a taxable and tax-exempt bond on equal footing. To calculate tax-equivalent yield, divide the municipal (tax-free) yield by 100% minus the investor’s tax bracket. This formula helps in comparing municipal and taxable bonds. 

  • Bonds typically pay interest on a semiannual basis, or every 6-months.

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