| Closing Market Price | $15.64 |
| Closing NAV | $15.39 |
| Premium/(Discount) | 1.62% |
| 52-week Average Premium/Discount | 5.35% |
| Current Distribution Rate 1, 2 | 9.65% |
| Monthly Distribution Per Share2 | $0.12573 |
| Ex-Distribution Date | 11/15/2024 |
| Payable Date | 11/29/2024 |
| Common Shares Outstanding | 26,519,937 |
| Daily Volume | 135,724 |
| 52 Week High/Low Market Price | $18.52/$15.51 |
| 52 Week High/Low NAV | $16.21/$15.02 |
| Intraday Trading Information | NYSE |
| Closing Market Price | $15.68 |
| Closing NAV | $15.36 |
| Closing Volume | 213,834 |
| Premium/(Discount) | 2.08% |
| Distribution Rate | 9.62% |
| Total Managed Assets | $517,669,328 |
| Percent Leveraged3 | 21.31% |
| 52-Week Average Premium/Discount | 5.33% |
| Fiscal Year-End | 5/31 |
| Investment Adviser | Guggenheim Funds Investment Advisors, LLC |
| Investment Sub-Adviser | Guggenheim Partners Investment Management, LLC |
| Expense Ratio (Common Shares)4 | 3.15% |
| Portfolio Turnover Rate | 17% |
| Inception Date | 10/26/2010 |
| NYSE Symbol | GBAB |
| NAV Symbol | XGBAX |
| CUSIP | 401664107 |
| Inception Market Price | $20.00 |
| Inception NAV | $19.10 |
| Leverage Outstanding | $110,323,096 |
| 1940 Act Asset Coverage Ratio | 469.23% |
| MARKET PRICE | NAV | |
|---|---|---|
| 2024 YTD | 16.58% | 7.79% |
| 1 Year | 24.50% | 18.66% |
| 3 Year | -2.12% | -3.14% |
| 5 Year | 1.83% | 0.73% |
| 10 Year | 5.72% | 3.70% |
| Since Inception (10/26/10) | 6.64% | 6.09% |
Performance data quoted represents past performance, which is no guarantee of future results, and current performance may be lower or higher than the figures shown. Since Inception returns assume a purchase of common shares at each Fund’s initial offering price for market price returns or the Fund’s initial net asset value (NAV) for NAV returns. Returns for periods of less than one year are not annualized. All distributions are assumed to be reinvested either in accordance with the dividend reinvestment plan (DRIP) for market price returns or NAV for NAV returns. Until the DRIP price is available from the Plan Agent, the market price returns reflect the reinvestment at the closing market price on the last business day of the month. Once the DRIP is available around mid-month, the market price returns are updated to reflect reinvestment at the DRIP price. All returns include the deduction of management fees, operating expenses and all other fund expenses, and do not reflect the deduction of brokerage commissions or taxes that investors may pay on distributions or the sale of shares. Please refer to the most recent annual or semi-annual report for additional information.
Distributions are not guaranteed and are subject to change.
1 Latest declared distribution per share annualized and divided by the current share price.
2 Distributions may be paid from sources of income other than ordinary income, such as short term capital gains, long term capital gains or return of capital. If a distribution consists of something other than ordinary income, a 19(a) notice detailing the anticipated source(s) of the distribution will be made available. The 19(a) notice will be posted to the Fund’s website and to the Depository Trust & Clearing Corporation so that brokers can distribute such notices to Shareholders of the Fund. Section 19(a) notices are provided for informational purposes only and not for tax reporting purposes. The final determination of the source and tax characteristics of all distributions in a particular year will be made after the end of the year. This information is not legal or tax advice. Consult a professional regarding your specific legal or tax matters.
3 Represents the amount of financial leverage the Fund currently employs as a percentage of total Fund assets.
4 Expense ratios are annualized and reflect the Fund’s operating expense, including interest expense, or in the case of a fund with a fee waiver, net operating expense, as of the most recent annual or semi-annual report. The expense ratio, based on common assets, excluding interest expense was 1.06%.
The Trust’s primary investment objective is to provide current income with a secondary objective of long-term capital appreciation. The Trust cannot ensure investors that it will achieve its investment objectives.
The Trust seeks to achieve its investment objectives by investing primarily in a diversified portfolio of taxable municipal securities and other investment grade, income generating debt securities, including debt instruments issued by non-profit entities (such as entities related to healthcare, higher education and housing), municipal conduits, project finance corporations, and tax-exempt municipal securities. Under normal market conditions:
Build America Bonds (“BABs”) are taxable municipal debt obligations issued pursuant to the American Reinvestment and Recovery Act of 2009 (the “Act”). BABs provide state and local governments with an alternative method of financing capital projects such as public buildings, schools and transportation infrastructure, which may be more affordable than issuing tax-exempt municipal securities. To help offset issuers’ borrowing costs, the U.S. Treasury Department (“Treasury”) subsidizes 35% of the interest paid on BABs. Issuers can elect to receive a direct payment from the Treasury (via the issuance of “direct payment BABs”) or to provide bondholders with a tax credit (via the issuance of “tax credit BABs”). Such subsidies may allow issuers to issue BABs that pay interest rates that are expected to be competitive with the rates paid by private bond issuers in the taxable fixed-income market. The BABs program allowed state and local governments to issue an unlimited amount of taxable debt through December 31, 2010, however, the issuance of BABs was discontinued on December 31, 2010. Under the sequestration process under the Budget Control Act of 2011, automatic spending cuts that became effective on March 1, 2013 reduced the federal subsidy for BABs and other subsidized taxable municipal bonds. The reduced federal subsidy has been extended through 2024. The subsidy payments were reduced by 7.3% in 2015 and by 6.8% in 2016.
Through a proprietary duration management trading strategy, the Trust will utilize a two-pronged approach that seeks to reduce the portfolio’s effective duration to generally less than 15 years.
Interest-Rate Swaps. GPIM will initially seek to take advantage of the relatively flat portions of the U.S. Treasury yield curve that appear to offer favorable decreases in duration without significant yield concessions. For example, this may be accomplished by combining the sale of interest-rate swaps on the long end of the yield curve with the purchase of interest-rate swaps on the intermediate portion of the yield curve. To take advantage of cost anomalies, GPIM will have the flexibility to opportunistically manage duration and may trade across other yield curves that exhibit similarly wide duration spreads with low spreads in yields.
Fixed-Income Sector and Security Selection. The Trust may invest in short-duration fixed-income securities, which may help to decrease the overall duration of the Trust’s portfolio while also potentially adding incremental yield.
GPIM may seek to manage the Trust’s duration in a flexible and opportunistic manner based primarily on then current market conditions and interest rate levels. The Trust may incur cost in implementing the duration management strategy. There can be no assurance that GPIM’s duration management strategy will be successful in managing the duration of the Trust’s portfolio or helping the Trust to achieve its investment objectives.
An open-end fund may be purchased or sold at NAV, plus sales charge in some cases. An open-end fund will issue new shares when an investor wants to purchases shares in the fund and will sell assets to redeem shares when an investor wants to sell shares. When selling an open-end fund the price the seller receives is established at the close of the market when the NAV is calculated. Unlike the open-end fund, a closed-end fund has a limited number of shares outstanding and trades on an exchange at the market price based on supply and demand. An investor may purchase or sell shares at market price while the exchange is open. The common shares may trade at a discount or premium to the NAV.
Leveraged closed-end funds offer investors the opportunity to purchase shares of a fund whose dividend yields generally are designed to be higher than those of similar, unleveraged investments. At the same time, leverage introduces or heightens certain investment risks. As a result, understanding leverage, its benefits and risks, plays an important role in determining whether a leveraged Fund is the right investment. Leverage creates risks that may adversely affect the return for the holders of common shares, including: the likelihood of greater volatility of NAV and market price of the Fund’s common shares, fluctuations in the dividend rates, and possible increased operating costs, which may reduce the Fund’s total return.
DRIP is the Dividend Reinvestment Plan. The DRIP price is the cost per share for all participants in the reinvestment plan. The DRIP price is determined by one of two scenarios. One, if the Common Shares are trading at a discount, the DRIP price is the weighted average cost to purchase the Common Shares from the NYSE or elsewhere. Lastly, if the Common Shares are trading at a premium, the DRIP price is the determined either the higher of the NAV or approximately 95% of the Common Share price.
Investment Adviser
Guggenheim Funds Investment Advisors, LLC
227 West Monroe Street
7th Floor
Chicago, IL 60606
Investment Sub-Adviser
Guggenheim Partners Investment Management, LLC
100 Wilshire Boulevard, Suite 500
Santa Monica, CA 90401
Ms. Walsh is Chief Investment Officer for Guggenheim Partners Investment Management where she is responsible for meeting the investment needs of the firm’s fixed-income clients, including insurance companies, corporate and public pension funds, sovereign wealth funds, endowments and foundations, consultants, wealth managers, and high-net-worth investors. In her role she oversees all elements of portfolio design, strategy, sector allocation, and risk management of fixed-income portfolios, as well as conveying Guggenheim’s macroeconomic outlook to portfolio managers and fixed-income sector specialists. She also serves as head of the Portfolio Construction Group and Portfolio Management teams. Ms. Walsh is also a Managing Partner of Guggenheim Partners.
Ms. Walsh has over 35 years of experience in investment management, and her specialization in liability-driven portfolio management derives from her deep background in insurance asset management. Before joining Guggenheim in 2007 she served as chief investment officer at Reinsurance Group of America, and as vice president and senior investment consultant at Zurich Scudder Investments. Ms. Walsh also served in senior investment roles at Lincoln Investment Management and American Bankers Insurance Group. Ms. Walsh holds a BSBA and MBA. from Auburn University and a JD from the University of Miami School of Law. She has earned the right to use the Chartered Financial Analyst® designation and is a member of the CFA Institute.
Mr. Brown joined Guggenheim in 2010 and is a Portfolio Manager for Guggenheim’s Active Fixed Income and Total Return Mandates. Mr. Brown works with the Fixed Income Chief Investment Officer and other members of the Portfolio Management team to develop and execute portfolio strategy. Additionally he works closely with the sector teams and Portfolio Construction group. Prior to joining the Portfolio Management team in 2012, Mr. Brown worked in the asset backed securities group. His responsibilities on that team included trading and evaluating investment opportunities and monitoring credit performance. Prior to joining Guggenheim, Mr. Brown held roles within structured products at ABN AMRO and Bank of America in Chicago and London. Mr. Brown earned a BS in Finance from Indiana University's Kelley School of Business. He has earned the right to use the Chartered Financial Analyst® designation and is a member of the CFA institute.
Mr. Li joined Guggenheim in 2007 with a dual role in equities and investment grade corporate research. He began covering municipal bonds when Guggenheim built up sector exposure to take advantage of the auction-rate securities market dislocation in early 2008. He manages Guggenheim’s dedicated municipal portfolios in addition to overseeing multi-strategy accounts’ exposure to the sector. Mr. Li received a B.A. in Economics from Cornell University. He has earned the right to use the Chartered Financial Analyst® designation and is a member of the CFA Institute.
Mr. Bloch joined Guggenheim in 2012 and is a portfolio manager for Guggenheim’s Active Fixed Income and Total Return Mandates. Mr. Bloch works with the Fixed Income Chief Investment Officer and other portfolio managers to develop portfolio strategy in line with the firm’s views. He oversees strategy implementation, working with research analysts and traders to generate trade ideas, hedge portfolios, and manage day-to-day risk. Prior to joining Guggenheim, he worked in Leveraged Finance at Bank of America Merrill Lynch in New York where he structured high-yield bonds and leveraged loans for leveraged buyouts, restructurings, and corporate refinancings across multiple industries. Mr. Bloch graduated with a Bachelor’s degree from the University of Pennsylvania.
Mr. Serdensky joined Guggenheim in 2018 and is a Portfolio Manager for Guggenheim’s Active Fixed Income and Total Return mandates, specializing in corporate credit. Previously, Mr. Serdensky was a Trader on the Investment Grade Corporate team at Guggenheim Investments, where he was responsible for identifying and executing investment opportunities across corporate securities. Prior to joining Guggenheim, Mr. Serdensky was a Vice President and Portfolio Manager at BlackRock, responsible for actively managing High Yield and Multi-Sector Credit portfolios. Mr. Serdensky started his career at PIMCO supporting Total Return and Alternative strategies. Mr. Serdensky completed his B.S. in Finance from the University of Maryland and earned his M.S. in Finance from Washington University in St. Louis.
Investors should consider the following risk factors and special considerations associated with investing in the Trust. An investment in the Trust is subject to investment risk, including the possible loss of the entire principal amount invested. During periods of adverse economic, financial, geopolitical, labor, public health and other developments or conditions, the risks associated with an investment in the Trust’s common shares may be heightened.
The following is not a complete discussion of the risks associated with an investment in the Trust. Please read the Trust’s annual report to shareholders for more detailed information regarding these and other risks.
The Trust may not be suitable for all investors. There can be no guarantee the Trust will achieve its investment objectives or that the Trust’s management will produce the desired results. An investment in the shares of the Trust should not be considered a complete investment program. The net asset and market values of the Trust’s shares will fluctuate, sometimes independently, based on market and other factors affecting the Trust and its investments. The market value of Trust shares will either be above (premium) or below (discount) their net asset value. Although the net asset value of Trust shares is often considered in determining whether to purchase or sell Trust shares, whether investors will realize gains or losses upon the sale of Trust shares will depend upon whether the market price of Trust shares at the time of sale is above or below the investor’s purchase price. Market value movements of Trust shares are thus material to investors and may result in losses, even when net asset value has increased. At any point in time, your shares of the Trust may be worth less than your original investment, even after including the reinvestment of Trust dividends and distributions. The Trust is designed for long-term investors; investors should not view the Trust as a vehicle for trading purposes.
Municipal securities are subject to a variety of risks, including credit, interest rate, prepayment, liquidity, tax and valuation risks, and the risks associated with investments in debt instruments, such as the financial condition of the issuer. To the extent the Trust invests a substantial portion of its assets in municipal securities issued by issuers in a particular state, municipality or project, the Trust will be particularly sensitive to developments and events adversely affecting such state or municipality or with respect to a particular project, including, among other things, demographic trends. While an insured municipal security will typically be deemed to have the rating of its insurer, if the insurer of a municipal security suffers a downgrade in its credit rating or the market discounts the value of the insurance provided by the insurer, the rating of the underlying municipal security will be more relevant and the value of the municipal security would more closely, if not entirely, reflect such rating. In such a case, the value of insurance associated with a municipal security would decline and may not add any value.
BABs are a form of municipal financing. The BABs market is smaller and less diverse than the broader municipal securities market and the number of available BABs is limited, which may negatively affect the value of the BABs. In addition, there can be no assurance that BABs will continue to be actively traded. It is difficult to predict the extent to which a market for such bonds will continue, meaning that BABs may experience greater illiquidity than other municipal obligations. Because issuers of direct payment BABs held in the Trust’s portfolio receive reimbursement from the U.S. Treasury with respect to interest payments on bonds, there is a risk that those municipal issuers will not receive timely payment from the U.S. Treasury and may remain obligated to pay the full interest due on direct payment BABs held by the Trust. The federal subsidy for BABs and other subsidized taxable municipal bonds have recently been reduced, and refund payments issued to and refund offset transactions for BABS are subject to sequestration. Furthermore, it is possible that a municipal issuer may fail to comply with the requirements to receive the direct pay subsidy or that Congress may further reduce or terminate the subsidy altogether. In addition, the Internal Revenue Code contains a general offset rule (the “IRS Offset Rule”) which allows for the possibility that subsidy payments to be received by issuers of BABs may be subject to offset against amounts owed by them to the federal government. The IRS Offset Rule and the disallowance of any interest subsidy as a result of an IRS audit could potentially adversely affect a BABs issuer’s credit rating, and adversely affect the issuer’s ability to repay or refinance BABs. This, in turn, could adversely affect the ratings and value of the BABs held by the Trust and the Trust’s net asset value. The IRS has, at times, withheld subsidies from several states and municipalities.
Municipal leases and certificates of participation involve special risks not normally associated with general obligations or revenue bonds. Although the obligations may be secured by the leased equipment or facilities, the disposition of the property in the event of non-appropriation or foreclosure might prove difficult, time consuming and costly, and may result in a delay in recovering or the failure to fully recover the Trust’s original investment.
The Trust’s debt investments present certain risks, including issuer, spread, credit, interest rate, liquidity, extension and prepayment risks, and will change in value in response to interest rate changes and market and economic conditions, among other factors. Investing in debt issued by non-profit institutions, including foundations, museums, cultural institutions, colleges, universities, hospitals and healthcare systems, involves different risks than investing in municipal bonds, including the risk of such non-profit institutions losing their tax-exempt status under Section 501(c)(3) of the Internal Revenue Code. Additionally, non-profit institutions that receive federal and state appropriations face the risk of a decrease in or loss of such appropriations.
Hospitals and healthcare systems are highly regulated at the federal and state levels and face burdensome state licensing requirements and risks related to increased competition from other health care providers; increased costs of inpatient and outpatient care; and increased pressures from managed care organizations, insurers, and patients to cut the costs of medical care. There is also a risk that a state could refuse to renew a hospital’s license or that the passage of new laws or regulations could inhibit a hospital from growing its revenues.
There is a risk that non-profit institutions relying on philanthropy and donations to maintain their operations will receive less funding during economic downturns. An economic downturn may place unique pressures on these institutions and cause decreased revenues or lead to layoffs and cost-cutting measures. As a result, some of these institutions have been or may be forced out of business.
Municipal conduit bonds are not backed by the full faith, credit or general taxing power of the issuing governmental entity and are therefore subject to heightened credit risk. Investors involved in project finance face heightened technology risk, operational risk and market risk.
While interest earned on municipal securities is generally not subject to federal tax, any interest earned on taxable municipal securities is fully taxable at the federal level and may be subject to tax at the state level. The Trust may invest a significant portion of its managed assets in certain sectors (including hospital and healthcare facilities, special taxing districts, education, municipal utility securities and transportation), which may subject the Trust to additional risks associated with those sectors. For example, the education sector can be significantly affected by unanticipated revenue decline resulting primarily from a decrease in student enrollment or reductions in state and federal funding, restrictions on students’ ability to pay tuition, and declining general economic conditions or fluctuations in interest rates. The transportation sector, including airports, airlines, ports and other transportation facilities, can be significantly affected by changes in the economy, fuel prices, maintenance, labor relations, insurance costs and government regulation.
The market value of a corporate bond may be affected by factors directly related to the issuer, such as investors’ perceptions of the creditworthiness of the issuer, the issuer’s financial performance, perceptions of the issuer in the marketplace, performance of management of the issuer, the issuer’s capital structure and use of financial leverage and demand for the issuer’s goods and services, as well as general market conditions. There is a risk that the issuers of corporate bonds may not be able to meet their obligations on interest or principal payments at the time called for by an instrument or at all.
Investments in loans, including directly or through participations or assignments, involve special types of risks, including credit risk, interest rate risk, counterparty risk, liquidity risk, prepayment risk and extension risk. Loans and other debt instruments are also subject to the risk of price declines due to increases in prevailing interest rates. An economic downturn or individual corporate developments could adversely affect these instruments (including the market for these instruments) and reduce the Trust’s ability to sell these instruments at an advantageous time or price. The Trust’s investments in senior secured floating rate loans made to corporations and other non-governmental entities and issuers are typically below investment grade and are considered speculative because of the credit risk of the applicable issuer.
The Trust’s investments in other investment vehicles subject the Trust to the risks affecting (such as leverage), and expenses of, those investment vehicles. The Trust’s structured finance investments may include residential and commercial mortgage-related and other asset backed securities issued by governmental entities and private issuers. Holders of structured finance investments bear risks of the underlying investments (e.g., risks associated with investments in real estate), index or reference obligation and are subject to counterparty risk.
In addition, the Trust may invest up to 20% of its managed assets in below investment grade securities (i.e., “junk bonds”). These investments may be less liquid, and therefore more difficult to value accurately and sell at an advantageous price or time, and present more risks than investment grade bonds.
The Trust may utilize financial leverage to the maximum extent permitted by its investment policies and restrictions and applicable law. Leveraging will exaggerate the effect on net asset value of any increase or decrease in the market value of the Trust’s portfolio. The use of financial leverage by the Trust will cause the net asset value, and possibly the market price, of the Trust’s common shares to fluctuate significantly in response to changes in interest rates and other economic indicators. The Trust may utilize financial leverage through investments in inverse floating-rate securities, which may subject the Trust to the risks of reduced or eliminated interest payments and losses of principal.
The Trust’s use of derivatives such as futures, options and swap agreements may expose the Trust to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. Certain of the derivative instruments, such as swaps and structured notes, are also subject to the risks of counterparty default and adverse tax treatment. The Trust could lose money if the issuer or guarantor of a debt instrument or a counterparty to a derivatives transaction or other transaction is unable or unwilling, or perceived to be unable or unwilling, to pay interest or repay principal on time or defaults or otherwise does not perform its obligations. In addition, the Trust may make short sales of securities. Although the Trust’s gain is limited to the price at which it sold the security short, its potential loss is theoretically unlimited.
The income investors receive from the Trust may vary widely over the short- and long-term as a result of, among other things, interest rate changes. In addition, interest rate changes may adversely affect the Trust’s investments, such as the value or liquidity of, and income generated by, the investments or increase risks associated with such investments, such as credit or default risks.
Activities and dealings of Guggenheim Partners and its affiliates may affect the Trust in ways that may disadvantage or restrict the Trust or be deemed to benefit Guggenheim Partners and its affiliates. For example, from time to time, conflicts of interest may arise between a portfolio manager’s management of the investments of the Trust on the one hand, and the management of other registered investment companies, pooled investment vehicles and other accounts on the other. The Trust’s governing documents include provisions that could limit the ability of other entities or persons to acquire control of the Trust or convert the Trust to an open-end fund. Like other funds and other parts of the modern economy, the Trust and its operations are subject to risks associated with cyber incidents and market or operational disruptions.
The Trust is not guaranteed by the U.S. government.
Guggenheim Investments represents the investment management business of Guggenheim Partners, LLC ("Guggenheim"). Guggenheim Funds Distributors, LLC is an affiliate of Guggenheim.
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