| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 3.56% | 5.48% | 5.26% |
The Robinson Tax-Advantaged Income Fund returned 5.48% in Q2 2026, significantly outperforming its benchmark's 1.22% return. The Fund invests in tax-exempt closed-end funds holding investment-grade municipal bonds while hedging interest rate risk through short positions in US Treasury futures. This strategy isolates municipal credit spreads and CEF discounts as return drivers. Credit spreads between municipal bonds and Treasuries narrowed during the quarter, with the NAV return of the Fund's CEF holdings up 3.97%. Tax-exempt CEF discounts improved to -2.46%, though this masks significant dispersion: Nuveen and Invesco CEFs now trade at a 0.3% premium after distributing above net income since late 2023, while the rest of the market trades at a -7.5% discount. The manager remains way underweight Nuveen/Invesco and way overweight other CEFs. The market shifted from expecting rate cuts to pricing in two rate hikes by year-end after new Fed Chairman Kevin Warsh re-committed to the 2% inflation target. The manager expresses concern about the $39 trillion US deficit and prefers being long municipal issuers and short Treasuries given fiscal recklessness. The Fund's hedging strategy should provide inflation mitigation and benefit from yield curve flattening.
The Robinson Tax-Advantaged Income Fund seeks to generate tax-exempt income by investing in closed-end funds holding investment-grade municipal bonds while hedging interest rate risk through short positions in US Treasury futures, thereby isolating municipal credit spreads and CEF discounts as the primary return drivers.
The manager expects the Fund to hold up well in the near-term as the Strait re-opens and the yield curve flattens. However, the long-run outlook is more challenging given the US deficit situation, which could push longer-term Treasury yields meaningfully higher. The manager prefers to be long municipal issuers and short Treasury futures to reduce interest rate risk exposure. The Fund's holdings of tax-exempt CEFs have upside potential as discounts narrow toward their historic average and eventually toward zero.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 7 2026 | 2026 Q2 | - | Closed-End Funds, Federal Reserve, Hedging, interest rates, municipal bonds, tax-exempt, US Deficit | - | Robinson Tax-Advantaged Income Fund delivered 5.48% in Q2 2026 by investing in tax-exempt closed-end funds while hedging interest rate risk through Treasury futures shorts. The strategy isolates municipal credit spreads and CEF discounts as return drivers. The manager rotated away from Nuveen/Invesco CEFs now trading at premiums toward the broader market trading at -7.5% discounts. The hedging approach provides inflation protection while capitalizing on narrowing municipal credit spreads. |
| Apr 9 2026 | 2026 Q1 | - | Closed-End Funds, Hedging, inflation, interest rates, municipal bonds, tax-exempt | - | Robinson Tax-Advantaged Income Fund hedges interest rate risk while investing in discounted municipal bond closed-end funds. Iranian geopolitical tensions shifted Fed expectations from rate cuts to potential hikes, causing energy inflation. Fund maintains underweight in compressed Nuveen/Invesco CEFs, overweight broader universe at -7.7% average discount versus -5.3% historic average. |
| Jan 30 2026 | 2025 Q4 | ROBAX, ROBCX, ROBNX | CEF, credit spreads, Discounts, Fed policy, Hedging, interest rates, municipal bonds, tax-exempt | - | Robinson Tax-Advantaged Income Fund outperformed in Q4 2025 by capitalizing on municipal bond CEF discounts while hedging interest rate risk. With CEF discounts wider than historical averages and Fed rate cuts supporting distribution yields, the fund offers above-market tax-exempt income with upside potential from discount normalization despite concerns over broader market valuations. |
| Oct 10 2025 | 2025 Q3 | - | CEFs, credit spreads, fixed income, Hedging, interest rates, municipal bonds, Valuations | - | Robinson Tax-Advantaged Income Fund tactically reduced CEF exposure from 100% to 60% ahead of expected tax-loss harvesting season, aiming to repurchase at wider discounts. The fund's hedging strategy continues to neutralize interest rate risk while generating tax-exempt income. Management remains cautious on stretched market valuations despite strong Q3 performance of 3.90%. |
| Jun 30 2025 | 2025 Q2 | - | credit spreads, Fed policy, Hedging, inflation, interest rates, municipal bonds, tax-exempt, Treasury Futures | - | Robinson Tax-Advantaged Income Fund underperformed in Q2 as municipal bond supply pressures widened credit spreads. The Fund's Treasury futures hedging strategy isolates CEF discounts and credit risk while providing potential inflation protection. Despite challenging conditions, attractive CEF discount levels and strong income distribution rates present compelling opportunities amid policy uncertainty and elevated market valuations. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
Municipal BondsThe Fund invests in tax-exempt closed-end funds holding investment-grade municipal bonds. Credit spreads between municipal bonds and Treasuries narrowed throughout the quarter, with the yield on the Bloomberg 10+ Year Municipal Bond Index declining 0.29% while Treasury yields increased 0.02%. The Fund's NAV return of underlying tax-exempt CEF holdings was up 3.97% for the quarter. |
Municipal Bonds Credit Spreads Tax-Exempt Investment Grade |
CEF DiscountsTax-exempt CEF discounts improved from around -4% to -2.46% during the quarter. The manager heavily overweighted Nuveen and Invesco CEFs when discounts were around -15% in late 2023, as these funds were distributing above net income (return of capital). These funds now trade at a 0.3% premium, while the rest of the market trades at a -7.5% weighted average discount. The Fund remains way underweight Nuveen/Invesco and way overweight the rest of the universe. |
Closed-End Funds Discounts Premiums Return of Capital | |
RatesThe market shifted from expecting 2-3 rate cuts to pricing in 2 rate hikes by year-end following new Fed Chairman Kevin Warsh's first FOMC meeting in mid-June. Warsh re-committed to the Fed's 2% inflation target rather than laying groundwork for future rate cuts. The manager expects this to result in a flattening yield curve with T-Bill rates edging higher and possibly lower longer-term Treasury yields, which should benefit the Fund as most tax-exempt CEFs concentrate holdings at the long end of the curve. |
Interest Rates Federal Reserve Yield Curve Rate Hikes | |
InflationThe manager discusses the Iranian excursion pushing the market from expecting rate cuts to rate hikes. They note that growing the economy out of the deficit would require running the economy very hot with continued high inflation and a devalued dollar, neither of which is typically good for reducing longer-term bond yields. The Fund's hedging strategy is positioned to provide meaningful mitigation should there be a reemergence of inflation. |
Inflation Monetary Policy Economic Growth | |
US DeficitThe US now has a $39 trillion deficit with no one in Washington caring because the fiscal solution of cutting spending or increasing taxes is unpopular with voters. The deficit is projected to continue growing as it has every year since 2001. The manager questions how much and at what rate investors would loan money to an entity that has spent more than it earned for 25 consecutive years, noting that corporate and municipal issuers would be locked out of markets with such fiscal recklessness. |
Federal Deficit Fiscal Policy Government Spending | |
Treasury HedgingThe Fund neutralizes the impact of changes in risk-free interest rates through carefully weighted short positions in US Treasury bond futures contracts. This isolates the inherent credit spreads of the underlying investment-grade municipal bond portfolio and tax-exempt CEF discounts. The manager prefers to be long municipal issuers and short Treasury futures to reduce overall interest rate risk exposure, especially given concerns about the US deficit and fiscal recklessness. |
Hedging Treasury Futures Interest Rate Risk Credit Spreads | |
| 2026 Q1 |
RatesThe bond market began 2026 anticipating 2-3 Fed rate cuts but shifted to expecting no cuts due to stabilized labor markets and Iranian excursion impacts. Further geopolitical tensions could push discussion toward rate hikes rather than cuts. |
Interest Rates Fed Policy Rate Cuts Monetary Policy Bond Yields |
InflationThe Iranian excursion caused immediate inflationary pressures with pump prices up 40% and diesel up 50%, directly impacting costs of most goods. The fund's hedging strategy provides meaningful mitigation against reemergent inflation. |
Energy Prices Commodity Inflation Hedging Cost Pressures Geopolitical | |
| 2025 Q4 |
Live SportsManager sees live entertainment and sports as major investment opportunity, citing 55 million viewers for Chiefs-Cowboys game and upcoming World Cup. Recommends Atlanta Braves Holdings, Madison Square Garden Sports, Manchester United, and Rogers Communications as ways to invest in sports teams and related assets. |
Sports Entertainment Media Teams Broadcasting |
MediaFox and Versant Media Group highlighted as media investments. Fox benefits from live sports and news advertising, has strong balance sheet and buyback program. Versant spun off from Comcast, expected to pay down debt and generate significant cash flow. |
Broadcasting Cable Content Advertising Streaming | |
Natural GasNational Fuel Gas recommended based on substantial mineral ownership in Appalachian Basin overlying Marcellus and Utica shales. Natural gas provides 40% of US electric power, and company's reserves near population centers are underappreciated. |
Utilities Energy Infrastructure Pipelines Distribution | |
AerospaceAlbany International highlighted for its engineered composites business supplying aerospace industry. Company exploring strategic alternatives and potential spin-off to unlock value, with aerospace segment potentially acquired by strategic buyer. |
Defense Components Manufacturing Composites Aviation | |
AIAI described as accelerating and causing profound changes in economy and society, but expected to disappoint investors at some point. Compared to late 1990s tech boom with multiple speculative solutions and potential for significant market volatility. |
Technology Innovation Disruption Automation Productivity | |
GoldGold expert Caesar Bryan's fund returned 167% last year. Gold seen as store of value for governments and individual investors, with central banks and Dubai investors buying gold as alternative to dollars and crypto. |
Commodities Store of Value Monetary Central Banks Currency | |
| 2025 Q3 |
ETFsThe fund reduced exposure to tax-exempt CEFs from nearly 100% to less than 60% and reinvested proceeds in ETFs and mutual funds primarily invested in intermediate and long municipal bonds. Strong inflows into fixed income ETFs and mutual funds have been running at their strongest level since the post-COVID recovery. |
Municipal Bonds Fixed Income Inflows Positioning |
Credit StressCredit spreads between municipal bonds and Treasuries began to reverse the widening that occurred in the first half of the year. High yield credit spreads have only been narrower 3% of the time over the past 25 years, indicating stretched valuations in credit markets. |
Credit Spreads Municipal Bonds High Yield Valuations | |
Risk AppetiteMarkets showed strong risk appetite with the S&P 500 up 8.1% and Russell 2000 up 12.4% despite unemployment and inflation creeping higher. However, stretched valuations across equity and credit markets have made the manager increasingly concerned about valuation warning signs. |
Valuations Market Exuberance Warning Signs Stretched | |
RatesThe fund's hedging strategy neutralizes interest rate risk through short positions in US Treasury futures contracts. The strategy should provide meaningful mitigation should there be a reemergence of inflation and should benefit from Fed rate cuts. |
Interest Rates Hedging Treasury Futures Fed Policy | |
| 2025 Q2 |
Municipal BondsMunicipal bond market faced supply glut with new issuance continuing at higher-than-expected rates. Credit spreads between municipal bonds and Treasuries widened as municipal yields increased more than Treasury yields. The taxable equivalent yield spread between tax-exempt and taxable bonds pushed out nearly 1% year-to-date, creating potential buying opportunities. |
Municipal Credit Spreads Supply Tax-Exempt Yields |
Interest RatesFed rate cuts expected but timing uncertain - could be driven by falling inflation or rising unemployment. Previous Fed rate cuts of 1% resulted in 10-year Treasury yields increasing 1%, showing disconnect between short and long-term rates. Fund's hedging strategy designed to neutralize interest rate impact on underlying holdings. |
Fed Rate Cuts Treasury Hedging Duration | |
InflationInflation concerns persist with uncertainty around tariff impacts - whether importers or consumers pay could affect corporate profits or inflation. Fund's hedging strategy may provide meaningful mitigation should there be reemergence of inflation. Economic outlook complicated by multiple policy uncertainties. |
Tariffs Corporate Profits Policy Hedging Mitigation |
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