Delaware Investments, located in Philadelphia, PA, and the first company to launch state focused municipal bond funds, said it is launching a
Montana Municipal Bond Fund , targeted to tax-sensitive residents of that state.
The company has already created 23 of these funds in states including: Idaho, Iowa, Kansas, Minnesota, Missouri, Oregon and Wisconsin. The funds are designed to exempt individuals from state and federal income tax.
Chris Meyer, senior vice president of marketing and product management said, "We looked at the demographics of Montana and its competitive landscape. We found that there is a population of high net worth individuals. There is also a very high state income tax in Montana."
The funds produced by Delaware Investments are for residents of the state, Meyer said, meaning that people that do not have a residence in the state are ineligible to buy the bond.
The funds are all sold through financial advisors. To market the new product, Meyer said, "We are doing some special mailings to financial advisors in Montana to announce that it is coming out. We will also be sending faxes and emails." To get the word out company salespeople will also be available to explain how the fund works and its advantage to shareholders.
The fund will be managed by Elizabeth H. Howell, who also manages the other tax-free Delaware funds. The expense ratio will be capped at 1%, Mayer said.
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