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Jul 9, 2009 9:17 pm

What's the purpose of a Closed End Fund UIT?  Is it just simply the number of individual underlying issues?  They're muni bonds, right?  They're all fishing in the same pond.  And it's not all that deep.  So, what's the added benefit of the UIT when you can get what you're looking for in the CEF?  And is there really a need for 32 of them?  There are 4 different California specific funds in there.  Seems like overkill to me. 

Jul 9, 2009 9:41 pm

Come on jonesie… you should know this, diversification… just kidding i don’t know probably for ease of purchase… Instead of buying one closed end fund, buy 32 and diversify without having to buy them individually.

Jul 9, 2009 11:01 pm

[quote=Spaceman Spiff]

What's the purpose of a Closed End Fund UIT?  Is it just simply the number of individual underlying issues?  They're muni bonds, right?  They're all fishing in the same pond.  And it's not all that deep.  So, what's the added benefit of the UIT when you can get what you're looking for in the CEF?  And is there really a need for 32 of them?  There are 4 different California specific funds in there.  Seems like overkill to me. 

[/quote]   Would you rather fish in the pond with 1 hook or 32 hooks?   Who cares if it's overkill...as long as it gets the client to do something positive for themselves, why complain?
Jul 9, 2009 11:18 pm

[quote=snaggletooth][quote=Spaceman Spiff]

What's the purpose of a Closed End Fund UIT?  Is it just simply the number of individual underlying issues?  They're muni bonds, right?  They're all fishing in the same pond.  And it's not all that deep.  So, what's the added benefit of the UIT when you can get what you're looking for in the CEF?  And is there really a need for 32 of them?  There are 4 different California specific funds in there.  Seems like overkill to me. 

[/quote]   Would you rather fish in the pond with 1 hook or 32 hooks?   Who cares if it's overkill...as long as it gets the client to do something positive for themselves, why complain?[/quote]

Owned.
Jul 10, 2009 2:44 am

If just a few of the underlying CEFs cut their dividends, your quoted 6.6% is out the window, and if the underlying payouts decline, so will the NAV of the underlying funds.

Might be a good concept for a small investor and the commission isn’t bad but just be careful.

Jul 10, 2009 3:30 am
exUBS:

If just a few of the underlying CEFs cut their dividends, your quoted 6.6% is out the window, and if the underlying payouts decline, so will the NAV of the underlying funds.

Might be a good concept for a small investor and the commission isn’t bad but just be careful.

  Agreed.
Jul 10, 2009 5:14 am
B24:

[quote=Squash1]575898ad3

  Yup.  BBB.  Jones won't buy them, even if they are insured.  Uuuuhhhhh .  Well, I'm just gonna go sell some 42 year AA rated 5.7% munis.....  [/quote]

I'm at Jones, and I sold some BBB+ last week.  15yrs or so yielding 5.75%.  It's the lowest rated bond I've ever seen in inventory.

Have you guys at places other than Jones seen a reduction in your bond inventory?  Do you regularly get bonds with 0-15 years to maturity?  

My EDJ Bond ladder only has one rung - out at 30 years.   It feels so weird to say 2039 on the phone.      But I can only promise you'll get to keep it for ten!  
Jul 10, 2009 5:19 am

How do you guys overcome the 20-30 year bond objection?  Other than “you can sell it at any point”

Jul 10, 2009 1:43 pm
wsubob:

[quote=B24][quote=Squash1]575898ad3

  Yup.  BBB.  Jones won't buy them, even if they are insured.  Uuuuhhhhh .  Well, I'm just gonna go sell some 42 year AA rated 5.7% munis.....  [/quote]

I'm at Jones, and I sold some BBB+ last week.  15yrs or so yielding 5.75%.  It's the lowest rated bond I've ever seen in inventory.

Have you guys at places other than Jones seen a reduction in your bond inventory?  Do you regularly get bonds with 0-15 years to maturity?  

My EDJ Bond ladder only has one rung - out at 30 years.   It feels so weird to say 2039 on the phone.      But I can only promise you'll get to keep it for ten!  
[/quote]   There's plenty of short maturities, but the volume is pretty low.  So it's not bad if you need to get $25K here, $50K there, but you will never see $10mm of a 10 year bond.  The short stuff in inventory is usually just stuff that Jones has bought from clients and put into ivnentory.  However, sometimes you find a gem if you look regularly.  I have some short-term muni buyers, so I look maybe 2-3x per day - just set up quick-function keys for the inventory you want.  A few weeks ago, I grabbed $20K of a 5% A+ 2017 muni selling at 99.  But that stuff goes fast.
Jul 10, 2009 1:55 pm
B24:

[quote=wsubob] [quote=B24][quote=Squash1]575898ad3

  Yup.  BBB.  Jones won't buy them, even if they are insured.  Uuuuhhhhh .  Well, I'm just gonna go sell some 42 year AA rated 5.7% munis.....  [/quote]

I'm at Jones, and I sold some BBB+ last week.  15yrs or so yielding 5.75%.  It's the lowest rated bond I've ever seen in inventory.

Have you guys at places other than Jones seen a reduction in your bond inventory?  Do you regularly get bonds with 0-15 years to maturity?  

My EDJ Bond ladder only has one rung - out at 30 years.   It feels so weird to say 2039 on the phone.      But I can only promise you'll get to keep it for ten!  
[/quote]   There's plenty of short maturities, but the volume is pretty low.  So it's not bad if you need to get $25K here, $50K there, but you will never see $10mm of a 10 year bond.  The short stuff in inventory is usually just stuff that Jones has bought from clients and put into ivnentory.  However, sometimes you find a gem if you look regularly.  I have some short-term muni buyers, so I look maybe 2-3x per day - just set up quick-function keys for the inventory you want.  A few weeks ago, I grabbed $20K of a 5% A+ 2017 muni selling at 99.  But that stuff goes fast.[/quote]

Soooo...you slammed an old lady into an 8 year surrender period? Did you explain to her that the A+ rating comes from the same people who rated the CMO's?
Jul 10, 2009 2:12 pm
voltmoie:

How do you guys overcome the 20-30 year bond objection?  Other than “you can sell it at any point”

  Pitching munis is an appeal to greed. Highest yield wins. To get that high yield you need to go long. It's that simple.   When a client/prospect objects here's the answer:   "Mr. Smith, i was trying to get you the highest yield available. To do that we have to go long term. If you don't want to invest for that amount of time, how far out do you normally like to go?"   THis leads to fact finding  rating/maturity/amounts and any other wants or needs at the end of which you say to prospect:   "Terrific, I'll send you my card, some information on who we are and when i see something that fits I'll be back to you - one more question: If you really like the idea i trust an investment of $50,000 wouldn't be a problem for you right now?   You only need to ask the money question if it wasn't covered during the fact find. here's how that goes:   Ok, Mr. smith, I understand 30 years is too long for you?   Yes   How far out do you usually like to go?   No more than 10 to 15 years   Terrific, and what ratings do you like to stick with?   Good quality, triple A (they always say triple A)   Anything you don't like?   No, not really.   And when you buy a bond how much do you usually invest?   $25,000   And if we find something you are ready to go now?   If i like the bond.   Terrific!  Mr Smith what i'm going to do is get you out my card and some information on who we are and if i see something that fits I'll give you a call, fair enough?   OK with me. Ah, what did you say your name was?       All day long, that's how it's done.   The exact wording doesn't matter as long as the bases are covered.   Don't get hung up on bond maturity and don't make a decision for the prospect/client. There are buyers for every maturity. If the client/prospect doesn't go for the bond you are pitching then it's time to fall back and fact find and zero in on what they are looking for.   Using a muni to prospect with you are looking for muni buyers. it is unlikely that the bond being presented will fit. Thus highly unlikely to sell on the first call, though it's been done. The bond gets a conversation going enabling you to fact find to call back with an exact fit.   Simple simple simple- butttttttttt not easy!                
Jul 10, 2009 2:40 pm

Thanks, good stuff. 

  Imagine for a moment you are an EDJ guy in a small area of around 15,000 people and most of your prospects are not traditional bond buyers.  They think bond, they think stock market.   Would your strategy change?
Jul 10, 2009 2:43 pm

[quote=voltmoie]Thanks, good stuff. 

  Imagine for a moment you are an EDJ guy in a small area of around 15,000 people and most of your prospects are not traditional bond buyers.  They think bond, they think stock market.   Would your strategy change?[/quote]


Yesterday's equity buyers are today's bond buyers. Don't let these fools make you think that people have to make very high returns to be happy. It's not true.
Jul 10, 2009 4:09 pm
DHK:

[quote=B24][quote=wsubob] [quote=B24][quote=Squash1]575898ad3

  Yup.  BBB.  Jones won't buy them, even if they are insured.  Uuuuhhhhh .  Well, I'm just gonna go sell some 42 year AA rated 5.7% munis.....  [/quote]

I'm at Jones, and I sold some BBB+ last week.  15yrs or so yielding 5.75%.  It's the lowest rated bond I've ever seen in inventory.

Have you guys at places other than Jones seen a reduction in your bond inventory?  Do you regularly get bonds with 0-15 years to maturity?  

My EDJ Bond ladder only has one rung - out at 30 years.   It feels so weird to say 2039 on the phone.      But I can only promise you'll get to keep it for ten!  
[/quote]   There's plenty of short maturities, but the volume is pretty low.  So it's not bad if you need to get $25K here, $50K there, but you will never see $10mm of a 10 year bond.  The short stuff in inventory is usually just stuff that Jones has bought from clients and put into ivnentory.  However, sometimes you find a gem if you look regularly.  I have some short-term muni buyers, so I look maybe 2-3x per day - just set up quick-function keys for the inventory you want.  A few weeks ago, I grabbed $20K of a 5% A+ 2017 muni selling at 99.  But that stuff goes fast.[/quote]

Soooo...you slammed an old lady into an 8 year surrender period? Did you explain to her that the A+ rating comes from the same people who rated the CMO's?
[/quote]   Soooo......you drinking already?
Jul 10, 2009 5:26 pm

[quote=B24]

Soooo......you drinking already?[/quote]   What's wrong with that?  It's 5:00 somewhere, right?
Jul 10, 2009 8:50 pm

[quote=voltmoie]Thanks, good stuff. 

  Imagine for a moment you are an EDJ guy in a small area of around 15,000 people and most of your prospects are not traditional bond buyers.  They think bond, they think stock market.   Would your strategy change?[/quote]   And for good reason this go-round.
Jul 10, 2009 8:55 pm
Squash1:

Use to be at jones know the feeling… Still compare inventory with a friend that works there…

Had a friend who sold muni’s institutionally and said the Jones traders would call up and demand so many things that it was hard to fill orders, then they would want (either too many or not enough… don’t remember)

  I had an out-of-state indy buddy send me a list of muni bonds he has available from my state, and I was floored at the inventory he has accessible to him.   There are muni issues all around me that I had no idea even existed.   I was shocked at first.   Then the embarrassment set in.
Jul 10, 2009 8:56 pm

That’s funny…

Jul 10, 2009 9:27 pm

[quote=voltmoie]Thanks, good stuff. 

  Imagine for a moment you are an EDJ guy in a small area of around 15,000 people and most of your prospects are not traditional bond buyers.  They think bond, they think stock market.   Would your strategy change?[/quote]   My pitch is aimed at finding yield buyers, muni and otherwise. Unless your area is on the moon my pitch will work. I guess it could work on the moon as well, i've just never called there. So, maybe it would work there as well. Perhaps you could post the area code and i'll give it a shot.   This pitch works everywhere. I have many clients across the country who live in towns with a Jones office. Some within walking distance. Butttt, if you'd like you can modify the pitch to any fixed income product Or you could even use the trusty Bill Good Muni UIT pitch. That expains what munis are and then probes for interest. Go to BG's web site and check out some of his free for the taking scripts.   The key is less in what you say and more in that you say it 50 to100 times a day. You have less than 10 seconds to grab the prospect's attention. That's why we use high yield   Mr. Smith i'm calling today with a tax free bond (note i don't say municipal) that's yielding almost 6% tax free. That's the same as a CD yielding over 9%. Do you have any CDs yielding 9%?    (no)    Does this sound like something you could have an interest in?   There are a zillion ways to do this. They all work because they all have one thing in common-making the call.   And while cold calling if you and everyone else here continues to over think it no one will amake any calls. Just do it. If it doesn't work, change something and do it some more. keep changing until you hit on what works for you.
Jul 11, 2009 2:27 pm

Cool, thanks!