Our Perspective GREEN BONDS - JULY 2016 SRI tax exempt investing is still somewhat in its infancy and we have not seen any significant pricing differential between green and regular bonds. As we have previously stated, most muni bonds are used for capital projects and infrastructure that have historically delivered benefits that today could be construed as green and socially responsible. As such, many traditional investors view the new ‘green’ designation as more of a marketing ploy, particularly since the current standards and accountability are voluntary, which could be one of the reasons for the lack of a pricing differential. Municipal bonds also often lag taxable fixed income investing trends because of the large component of individual investors, but retail appetite for environmentally friendly investing is likely to grow going forward.

The green designation may also expand the network for potential investors, including cross-over investors that are not typically active in the tax exempt market. Currently, the green designation is a free option, and if we like the underlying credit and sector, we will continue to overweight green bonds in anticipation of growing impact investing demand that could lead to technical outperformance. The assertions in this perspective are Seix Investment Advisors’ opinion. BofA Merrill Lynch Municipal Master Index tracks the performance of the investment-grade U.S. tax-exempt bond market.

Qualifying bonds must have at least one year remaining term to maturity, a fixed coupon schedule, and an investment grade rating (based on average of Moody’s, S&P, and Fitch). Investment Risks: All investments involve risk. Debt securities (bonds) offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return.

Generally, a portfolio’s fixed income securities will decrease in value if interest rates rise and vice versa. A portfolio’s income may be subject to certain state and local taxes and, depending on your tax status, the federal alternative minimum tax. There is no guarantee a specific investment strategy will be successful. This information and general market-related projections are based on information available at the time, are subject to change without notice, are for informational purposes only, are not intended as individual or specific advice, may not represent the opinions of the entire firm, and may not be relied upon for individual investing purposes.

Information provided is general and educational in nature, provided as general guidance on the subject covered, and is not intended to be authoritative. All information contained herein is believed to be correct, but accuracy cannot be guaranteed. This information may coincide or conflict with activities of the portfolio managers.

It is not intended to be, and should not be construed as investment, legal, estate planning, or tax advice. Seix Investment Advisors does not provide legal, estate planning or tax advice. Investors are advised to consult with their investment processional about their specific financial needs and goals before making any investment decisions. Past performance is not indicative of future results. ©2016 Seix Investment Advisors LLC.

Seix Investment Advisors is a registered investment adviser with the SEC and a member of the RidgeWorth Capital Management LLC network of investment firms. .