06/16/2014

Kentucky Hospital Bonds: Searching for Opportunity amid Turmoil

by

During the third quarter of 2013, in an unsettled national municipal bond market environment, hospital bonds saw an increase in selling pressure precipitated by uncertainty surrounding the roll-out of the Affordable Care Act. During that same time period, the United States Department of Justice filed a lawsuit against King’s Daughters Medical Center in Ashland, Kentucky for purportedly submitting false claims to Medicare – bringing further scrutiny to the sector in the state of Kentucky. The hospital charged-off over $40 million in the third quarter due to the impending settlement, and national ratings services consequently downgraded approximately $240 million of...

Read more ›

04/30/2014

Aquila Three Peaks Opportunity Growth Fund: Fundamental Analysis Matters

by

You know you want to participate in the equity market, but how?

A growing number of investors recognize that it may be time to increase their allocation to equity.  What may be less clear is determining how to go about positioning assets in the equity market.

Consider this:  for several years, the Federal Reserve has been providing liquidity to the U.S. economy – liquidity that, to some degree, has contributed to the performance of the equity market.  If boats rose on the Fed’s tide of liquidity, what happens when that tide recedes?

Fundamental analysis matters.

Broad-based passive equity investments,...

Read more ›

04/30/2014

We Interview Anne Mills, Retiring Trustee

by

Looking Out for Shareholders

Aquila’s locally-based trustees play a crucial role in advocating on behalf of fund shareholders. As Anne J. Mills looks back on her tenure as a trustee on seven Aquila fund boards, we talked to her about what trustees do and what she’s seen in almost 30 years as a trustee.

How did you become involved with the Aquila Group of Funds?

Lacy Herrmann [Aquila’s founder] and I met in the mid-1980s, when we were both running for president of our college’s alumni board.  He...

Read more ›

04/15/2014

Are You Free of Your Tax Bill for the Year?

by

As you put the 2013 tax season behind you, think about how much of what you earn is allocated to pay taxes each year. This year, Americans will pay a total of $4.5 trillion, or 30.2% of their income in taxes. Consider how many days of work will be dedicated to paying that bill. Every year the Tax Foundation1 establishes Tax Freedom Day®, which marks the day when the nation has earned enough money collectively to pay its total tax bill. For 2014, Tax Freedom Day® falls on April 21st; three days later than 2013 due to the country’s...

Read more ›

04/08/2014

Municipal Bonds: Better Than You Think

by

For many years, the municipal bond market has provided investors with the benefit of earning income that is generally exempt from both federal and state income taxes. While several headline topics have raised concerns among municipal bond investors in recent years, our evaluation of current economic and market factors indicates to us that the condition of the municipal bond market may be better than you think.

Our new white paper, Municipal Bonds Better Than You Think, takes a look at the economic and market factors that have influenced the municipal bond market over the past several years, and reviews...

Read more ›

04/04/2014

One Hundred Years of the Federal Income Tax

by

It was 100 years ago this year that the first Form 1040 was sent out to taxpayers as ratification of the Sixteenth Amendment to the US Constitution made it possible for the federal government to tax personal incomes.

The new tax started at 1% on personal incomes of more than $3,000 (over $71,000 in today’s dollars) for single filers or $4,000 for couples and included a surtax of 6% on incomes over $500,000. Taxpayers were required to complete the new form and submit it to local tax collectors for review by...

Read more ›

04/03/2014

We Express our Appreciation to a Retiring Trustee

by

We would like to express our appreciation to a trustee who has recently retired from various fund boards after having served shareholders for many years.

Anne Mills became a trustee on the board of Aquila Tax-Free Trust of Arizona at the inception of the fund in 1986, and joined the boards of Aquila Tax-Free Fund of Colorado and Aquila Churchill Tax-Free Fund of Kentucky when both funds were launched in 1987.  In later years, she also joined the boards of Aquila Narragansett Tax-Free Income Fund and...

Read more ›

03/28/2014

Celebrating Our 30th Anniversary

by

Our History, People and Distinctive Strategy

Diana P. Herrmann, President & CEO, Aquila Investment Management LLC

Lacy Herrmann, Aquila’s founder, was one of the earlier pioneers in money market funds beginning in the mid-1970s. By the early 1980s, a handful of state-specific municipal bond mutual funds were being offered in states with large populations and higher tax rates, such as California, New York and Massachusetts.  Mr. Herrmann was intrigued with the concept of launching similar funds in other states.

Since the...

Read more ›

03/27/2014

Individual Stock Selection

by

Individual stock selection and active management are strategies that returned to prominence recently, according to a March 9, 2014 Wall Street Journal article.  “After years of moving in lock step on the back of global economic shocks, individual stocks increasingly have been dancing to their own tune” as evidenced by the steep decline seen in correlations1 between individual stocks in the S&P 500 since the financial crisis.

S&P Dow Jones Indices looks at active management from a different perspective in their S&P Indices Versus Active Funds or SPIVA Scorecard, which evaluates the performance of active versus passive management...

Read more ›

03/07/2014

A New Tax Confronts High Income Taxpayers

by

“The only things certain in life are death and taxes.” ~ Benjamin Franklin

Starting with the 2013 tax year, high income taxpayers will be subject to a new tax; the 3.8% Net Investment Income Tax (NIIT).  Instituted under the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, this tax is in addition to regular taxes and will be imposed on filers with Modified Adjusted Gross Income (MAGI) over certain thresholds.

The good news for investors in municipal bonds is that the interest income from a municipal bond is generally exempt from federal income...

Read more ›