December 11, 2023 — This presentation provides an overview of our market outlook and key themes, and it illustrates how Sage is positioned in the current environment.

Key Themes

• Seasonal Effects Remain Strong — Favorable technical factors provide a supportive market for municipals over the next several months.
• Credit Strength vs. Rate Risk — Municipal issuers are well positioned to weather any economic slowdown, but rate volatility will be elevated as Treasury yields react to rapidly changing market factors.
• “De Minimis” Tax Effects — The little-known pricing/tax risk regarding municipal bonds that trade below par and specifically affect sub-5% coupon bonds.

October 17, 2023 — This presentation provides an overview of our market outlook and key themes, and it illustrates how Sage is positioned in the current environment.

Key Themes

• Waiting on the Lag — Tighter monetary conditions and fading stimulus will hurt growth and challenge the soft-landing narrative in the coming months.
• Credit Risk vs. Rate Risk — A challenging economic outlook, yield cushion against any further hikes, and unfavorable valuations in risk assets make rate risk the less worrisome risk.
• Liquidity Drought — Issuance and QT will keep the bias toward shrinking liquidity after the market has ridden the wave of excess liquidity for years.

October 10, 2023 — In this presentation, Sage answers the 4 big questions (outlook for macroeconomic growth, Fed policy, valuations, and investor sentiment) and illustrates our municipal fixed income positioning in the current environment.

Market Outlook

• The third quarter was the epitome of a double-edged sword: above-average negative returns coincided with yield levels that reached extremely attractive levels.
• With the significant rise in yields, shorter-dated maturities outperformed. The Bloomberg Municipal Bond Index returned -3.95%, while the Bloomberg 1-10Y Blend Intermediate Index returned -2.23%.
• Credit fundamentals for municipal issuers continue to be solid, and liquidity ratios are sitting at their highest levels on record, providing a significant cushion if revenue streams begin to falter. However, lingering challenges could put some pressure on smaller or more rural issuers that lack robust or diversified revenue sources.
• As a result of the recent moves, the municipal market provides an excellent entry point for new investment, as well as for investors looking to de-risk from other higher-beta asset classes.

September 14, 2023 — In this presentation, Sage answers the 4 big questions (outlook for macroeconomic growth, Fed policy, valuations, and investor sentiment) and illustrates our municipal fixed income positioning in the current environment.

September 14, 2023 — Municipal Fixed Income Investment Strategy provides an overview of Sage’s market outlook and sector positioning.

Market Outlook

• Despite revenue receipts continuing to slow, municipal issuers remain strong and well positioned in the event of an economic slowdown. Rate volatility and uncertainty are the biggest challenges for fixed income investors, as the market remains focused on economic data and Fed policy.
• “Higher for longer” continues to be the overarching theme; however, rates seem to be closer to the top of the range. From a positioning standpoint, Sage is modestly long duration with a bias toward longer dated structures as the yield curve is inverted out to 10 years and positively sloped in the back end. Although valuations have recently compressed, Sage is still leaning into selective single A and BBB credits.