What is Our opinion of the odd lot advantage for a buy and hold investor?

We see a great advantage in bidding and buying odd lot bonds in the secondary market…particularly regarding tax free and taxable munis. Given inefficiencies in the market, there are certain opportunities where we may be able to source odd lot positions at a lower price than large, round lot, institutional sized pieces.

This is a significant benefit to a buy and hold individual investor. This dynamic allows us to methodically work the bid side of the market and provide value to our RIA clients. For the typical financial planner, he or she has a client who desires individual bonds, but has only small to midsize portfolios ($200K - $10 million). With our odd lot approach, we seek to achieve adequate diversification while building out a fully intact bond ladder. Odd lot pricing can also present various risk factors including the potential for disadvantageous pricing for a seller and less liquidity. All risks should be reviewed prior to investing.

Similarly, we have other more active strategies where we often will pick up bonds on the bid wires and work with our RIA clients to, at times, offer these bonds back to the street at levels that can add value to portfolios at times.