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Tax Exempt Portfolios Actively Managed Against Broad or State Specific Municipal Benchmarks

Philosophy & Objective

Municipal Fixed Income assignments at Northern Trust are constructed with the goal of generating consistent performance with predictable volatility. We emphasize the objectives of:

  • Managing to the client's unique tax situation
  • Preserving principal
  • Generating current income
  • Dampen the volatility of other asset classes
  • Providing liquidity in case of need

Investment Process

We have investment views, but our trading scale and skill allows us to be modest in taking traditional manager bets (duration and credit). We add thoughtful approaches to yield curve, sector, structure & state decisions, yet aiming to end up with portfolios that are often higher quality AND higher return than their benchmarks.

Managing credit risk is the cornerstone of our research process:

  • Strong sell discipline focused on identifying early signs of credit deterioration
  • Separate credit approval process from manager's purchase decision
  • Issuer financials are tracked electronically on a timely basis
  • Individual state analysis identifying macro trends

Investment Style

We incorporate key elements of our relative value style, emphasizing a rigorous security selection process while closely monitoring and controlling portfolio risk relative to a client-selected benchmark.

Active Management

We strive to capitalize on market inefficiencies to maximize total return - both income return and price appreciation:

  • The process goes beyond credit and interest rate decisions
  • Key value-added factors include yield curve positioning, security selection/structure decisions, and sector/state analysis

Disciplined Risk Control

We believe a comprehensive portfolio review process combined with a key understanding of risk is essential to meet our client's investment objectives:

  • Risk exposure guidelines established in line with client expectations
  • Daily monitoring of duration, sector concentration, and credit quality

Fundamental Research

We combine original credit and macroeconomic research with experience and judgment in the development of portfolio structure and characteristics:
  • Both issuer credit and enhancement (insurance) providers are evaluated
  • The structural risk of each security is evaluated and actively monitored

Flexible Structures

Northern Trust's capabilities can be delivered as separate accounts or mutual fund vehicles.
Fred Azar

Fred Azar

Director of Fixed Income Business Management
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Fred Azar

Fred Azar

Director of Fixed Income Business Management
Fred A. Azar is the Director of Fixed Income Business Management. In this role he is responsible for product development, management of existing products, communication of product performance, and education regarding Fixed Income capabilities, philosophy, and investment process. He represents the Fixed Income group in its interactions with our internal auditors, risk and compliance managers, marketing, and sales. Prior to his current role, he was Director of Core Strategies, responsible for overseeing actively managed fixed income investments for institutional and high net worth clients in mutual funds and separately managed accounts. Prior to this, he was a Senior Portfolio Manager in the Short Duration Fixed Income Group, managing cash, ultra short, and short bond investments.

Prior to joining Northern Trust in 2004, Fred was a Senior Portfolio Manager for the Harris Private Bank, where he managed separate account investments for high net worth and small institutional clients. He began his career in 1991, working as a trader within the Securities Lending Division of Harris Bank.

Fred received a B.S. degree in Accounting and Business Administration and an MBA from the University of Kansas. He is also a Certified Public Accountant.
Investment Products and Services are:

Not FDIC INSURED; May lose value; No bank guarantee

Investment products and services are offered through Northern Trust Securities, Inc., member FINRA and SIPC and a wholly owned subsidiary of Northern Trust Corporation. Any attached research reports containing the Northern Trust Logo or trademark were prepared solely by employees of Northern Trust Investments, Inc., an affiliate of Northern Trust Securities, Inc.

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© 2018 Northern Trust Corporation. Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A. Incorporated with limited liability in the U.S. Products and services provided by subsidiaries of Northern Trust Corporation may vary in different markets and are offered in accordance with local regulation. For more information, read our legal and regulatory information about individual market offices.

Northern Trust Asset Management is composed of Northern Trust Investments, Inc., Northern Trust Global Investments Limited, Northern Trust Global Investments Japan, K.K., NT Global Advisors, Inc., 50 South Capital Advisors, LLC, and personnel of The Northern Trust Company of Hong Kong Limited and The Northern Trust Company. This material is directed to professional clients only and is not intended for retail clients. For Asia-Pacific markets, it is directed to expert, institutional, professional and wholesale investors only and should not be relied upon by retail clients or investors. Issued in the United Kingdom by Northern Trust Global Investments Limited.

Institutional investor award winners are chosen by the editorial staff of Institutional Investor magazine based on their market intelligence, performance data and additional information received from the industry following a public call for nominations. Manager winners are also selected by the editors of the magazine based on the results of a survey conducted of U.S. institutional investors.