Thornburg Investment Management Review

Thornburg Investment Management is an investment firm based in Santa Fe, N.M. It offers a lineup of equity, fixed-income and alternative mutual funds for individuals, which are available exclusively through financial advisors. In addition, Thornburg provides portfolio management services for individual and institutional investors. It does not offer traditional financial planning services.

Assets under management (AUM): $43,583,549,685
Minimum investment: Varies by account and strategy used
Individual investor to advisor ratio: 16:1
Fee structure: A percentage of AUM
Headquarters: 2300 North Ridgetop Road Santa Fe, NM 87506 Website: www.thornburg.com Phone: 505-467-7200

All information included in this profile is accurate as of March 28, 2022. For more information, please consult Thornburg Investment Management’s website.

Overview of Thornburg Investment Management

Thornburg Investment Management got its start in 1982 with municipal bond funds. In fact, Thornburg only launched its first stock fund in 1995, and waited another three years to open its second. Today, Thornburg Investment Trust, a client of Thornburg Investment Management, has a lineup of publicly available mutual funds covering domestic, global and international equity, as well as taxable and tax-exempt bond funds. The firm also offers separately managed accounts and institutional strategies.

Thornburg has almost 200 employees, nearly 40 of whom perform investment advisory functions.

A look at the founder of Thornburg Investment Management

Garrett Thornburg is the founder of Thornburg Investment Management. He is currently the firm’s chairman and owns 100% of the firm’s voting shares.

Prior to founding the firm, Thornburg served as a limited partner at global investment bank Bear Stearns & Co., where he was a founding member of the firm’s public finance department. He also served as chief financial officer of New York State’s Urban Development Corporation and a financial advisor to the State of New Mexico’s Board of Finance.

What types of clients does Thornburg Investment Management serve?

Individual clients can access Thornburg’s investments through mutual funds, separately managed accounts and wrap programs. Minimum investment requirements vary by offering:

• Separately managed accounts: Private client separate accounts have minimums between $100,000 and $500,000 for a Private Client Equity Separate Account, and between $1 million to $25 million for Private Client Fixed Income Separate Account. However, the firm notes that it can waive minimums at its discretion.
• Wrap programs: Each wrap program sponsor has its own minimum account size, which typically ranges from $100,000 to $500,000 for equity accounts and from $1 million to $25 million for fixed-income accounts. Thornburg has the discretion to waive account minimums.

Services offered by Thornburg Investment Management

Thornburg Investment Management provides investment services covering a broad range of strategies, including municipal bond, taxable bond, domestic stock and international stock categories. The firm provides these investment strategies for its mutual funds, separately managed accounts and investment services for institutions and government entities.

Additionally, Thornburg participates in third-party wrap programs in which investors of some brokerage firms can choose to invest in a mutual fund from a select list for a reduced sales charge. Investors in third-party wrap programs do not pay fees directly to Thornburg. The sponsor pays Thornburg’s fee from the wrap fee paid by investors.

Here is a complete list of the services offered by the firm:

• Mutual funds
• Separately managed accounts for individuals
• Portfolio management for institutional clients, including corporations, pensions and government entities
• Wrap programs

How Thornburg Investment Management invests your money

Thornburg uses an active approach to manage its equity and fixed-income mutual funds and strategies. These funds and strategies cover both domestic and international markets. In addition, Thornburg has a sizable lineup of tax-exempt funds.

For equity funds, Thornburg employs a bottom-up style with analysts and portfolio managers constructing the portfolio on a stock-by-stock basis rather than relying on macro calls on sectors, economies or interest rates. Thornburg considers itself a long-term, value-driven investor and likes to keep turnover low. Managers also act as research analysts, and seek out securities that are well-priced relative to the stock’s long-term prospects. Additionally, the firm is beginning to take an ESG lens to all investment choices, considering whether it meets standards.

A hallmark of Thornburg’s fixed-income strategy is the bond ladder, which calls for buying bonds at staggered maturities along a “ladder,” so a portion of the portfolio’s assets matures each year. This strategy helps to reduce interest rate and investment risk.

Fees Thornburg Investment Management charges for its services

What fees Thornburg Investment Management charges for its services depends on the account type:

Private client and institutional client separate account fees: Thornburg generally charges a fee based on a percentage of assets under management for its institutional and private client separate accounts. The fees charged to separate accounts are negotiable and will vary depending on the type of client, the amount of assets under management and whether the client chooses to place restrictions on Thornburg’s discretionary investing authority.

The firm may charge a limited amount of performance-based fees as well, though this fee only applies only to institutional separate account clients and to certain private funds managed by the firm. Performance-based fees are charged when the portfolio manager produces positive returns.

Note that investors participating in institutional or private client programs pay less due to higher initial minimum investment requirements. Rates do not include additional charges that clients may pay, such as custodial fees, third-party money manager fees, brokerage and exchange fees and fees for certain trades.

Wrap program fees: Clients in Thornburg Investment Management’s wrap programs pay the program’s sponsor an annual fee, typically from 1% to 3% of assets under management. Thornburg receives an annual fee ranging from 0.30% to 0.75% of the assets it manages, depending on the size of the wrap program and the investment strategy. The exact rate will depend on factors including the size of the wrap program and the investment strategies offered.

Wrap program fees generally cover all brokerage commissions on executed trades, though clients will pay additional fees when trades are made with broker-dealers other than the sponsor.

Mutual fund fees: Shareholders in Thornburg Investment Management’s mutual funds pay a percentage of their assets under management. Fees vary depending on the strategy.

Thornburg Investment Management disciplinary disclosures

Thornburg Investment Management reports one disciplinary event in its Form ADV paperwork filed with the Securities and Exchange Commission (SEC). The disclosure stems from allegations from a German regulatory authority, BaFin, that the firm failed to file three voting rights notifications with BaFin and issuers in a timely manner. According to Thornburg, it had filed the voting rights on time but with minor errors, and that by the time it refiled them with the needed corrections they were no longer timely. The firm settled the matter in 2017 by paying a fine of 100,000 euros (approximately $111,000).

For more information, visit Thornburg Investment Management’s Investment Adviser Public Disclosure (IAPD) page.

Thornburg Investment Management onboarding process

1. Contact the firm to learn more: To learn more about working with Thornburg Investment Management, you can reach out in the following ways:
   • Fill out the contact form provided on the firm’s website
   • Call the firm at 800-847-0200
   • Email info@thornburg.com
2. Ask your advisor about investing in Thornburg funds: Thornburg mutual funds are available through financial intermediaries. You can contact your financial advisor if you want to invest in a Thornburg fund.
3. Receive regular reports: Investors can expect to receive reports on their accounts. Separate account clients will get their reports through their financial intermediary, while clients of the firm’s wrap fee program will receive reports from their program’s sponsor. Shareholders in Thornburg mutual funds will receive reports in accordance with their fund’s prospectus.

Where Thornburg Investment Management is located

Thornburg Investment Management lists just one location in the U.S., in Santa Fe, N.M. However, the firm has jurisdiction in all U.S. states, as well as the District of Columbia and Puerto Rico. It has international offices in London, Shanghai and Hong Kong.

Is Thornburg Investment Management right for you?

Thornburg Investment Management offers a well-regarded lineup of mutual funds covering major asset classes. With its roots in municipal bond investing, Thornburg remains a leader in this corner of fixed-income investing, and its bond ladder strategy is another way Thornburg makes its mark.

The firm works with individual investors, including high net worth individuals, as well as institutional investors. Prospective clients should be aware that the firm does not offer financial planning services. Additionally, clients should note that performance-based fees apply to certain private funds managed by the firm and that fees for certain funds may be above-average compared to comparable funds on Morningstar.

Before choosing a financial advisor, it’s always important to shop around and compare your options. Be sure to research multiple firms to ensure you find the right financial advisor for you.