NEW YORK, May 20, 2016 (GLOBE NEWSWIRE) -- 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. |
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.
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