Financial Data and Key Metrics Changes - For the December quarter, the company's net investment income was $91 million, or $0.19 per common share, with a net asset value (NAV) of approximately $3 billion, or $6.21 per common share [3] - The net debt-to-total assets ratio stood at 28.2%, with unsecured debt plus unsecured perpetual preferred accounting for 85.3% of total debt plus preferred [3] - Monthly common shareholder distributions of $0.04 per share were announced for February, March, and April, bringing total distributions since the IPO to $4.7 billion, or $21.93 per share [3] Business Line Data and Key Metrics Changes - The company is focusing on new investments in companies with less than $50 million of EBITDA, with the first lien mix increasing by 728 basis points to 71.4% since June 2024 [3][4] - The second lien mix decreased by 371 basis points to 12.7%, and the subordinated structured notes mix decreased by 818 basis points to near zero since June 2024 [4] - The portfolio included 91 companies across 32 industries, with an aggregate fair value of $6.4 billion, and the EBITDA to interest coverage for middle market lending is about 210% [8][10] Market Data and Key Metrics Changes - The company’s portfolio at cost included only 2.8% of investments in software companies, significantly lower than the 22% average across business development companies [9] - The real estate property portfolio at National Property REIT Corp. (NPRC) totaled 14% of investments at cost, with an unlevered investment-level gross cash IRR of 24% since inception [10][11] - Interest income for the 12-month period ending December 2025 was 92% of total investment income, reflecting a strong recurring revenue profile [11] Company Strategy and Development Direction - The company is enhancing portfolio company operations, focusing on first lien senior secured loans, and exiting subordinated structured notes and targeted equity-linked assets [4][10] - The strategy includes a prudent expansion into new states and offices, with significant opportunities identified in Florida and Tennessee [22] - The company aims to redeploy future real estate property exit proceeds primarily into more first lien senior secured loans [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's balance sheet strength and liquidity, highlighting a diversified access to funding and a strong lender community [13][15] - The company noted that tax refunds are not expected to create significant headwinds for loan balances, and consumer demand remains strong [22][23] - Management emphasized the importance of existing customer credit history in determining future financing, which helps mitigate risks associated with new borrowers [24] Other Important Information - The company has successfully completed the exit of its subordinated structured notes portfolio, which now represents only 0.2% of the investment portfolio at cost [10] - The weighted average cost of unsecured debt financing was 4.68% as of December 31, 2025, with a ladder of liabilities extending 26 years into the future [16] Q&A Session Summary Question: Impact of tax refunds on loan balances and strategy regarding Tower - Management indicated that they plan to continue working with First Tower, which has been a strong performer, and noted the tax advantages of holding it as a tax partnership [20][21] Question: Stability of convertible prep product line amid market changes - Management stated that interest rates are a significant factor, and the current environment may lead investors to prefer fixed-rate investments over floating-rate ones [26][28] Question: Consideration of pivoting into enterprise SaaS software - Management expressed a focus on their own investment strategy and noted that they have avoided software investments due to perceived risks, maintaining a low exposure compared to industry averages [36][37]

Financial Data and Key Metrics Changes - For the December quarter, the company's net investment income was $91 million, or $0.19 per common share, with a net asset value (NAV) of approximately $3 billion, or $6.21 per common share [3] - The net debt-to-total assets ratio stood at 28.2%, with unsecured debt plus unsecured perpetual preferred accounting for 85.3% of total debt plus preferred [3] - Monthly common shareholder distributions of $0.04 per share were announced for February, March, and April, totaling $4.7 billion distributed since the IPO [3] Business Line Data and Key Metrics Changes - The company increased its first lien senior secured middle market loans mix by 728 basis points to 71.4% since June 2024, while the second lien mix decreased by 371 basis points to 12.7% [3][4] - The exit of subordinated structured notes has been nearly completed, with the mix decreasing by 818 basis points to near zero since June 2024 [4][9] - The portfolio included 91 companies across 32 industries, with an aggregate fair value of $6.4 billion, and the EBITDA to interest coverage for middle market lending is about 210% [7][8] Market Data and Key Metrics Changes - The company’s interest income for the 12-month period ending December 2025 was 92% of total investment income, indicating a strong recurring revenue profile [10] - Non-accruals as a percentage of total assets stood at approximately 0.7% based on fair market value as of December [11] Company Strategy and Development Direction - The company is focusing on new investments in companies with less than $50 million of EBITDA and reducing exposure to second lien loans and subordinated structured notes [4] - The strategy includes enhancing portfolio company operations and utilizing a cost-efficient floating rate revolver to match floating rate assets [4] - The company aims to redeploy future real estate property exit proceeds primarily into more first lien senior secured loans [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the balance sheet strength and liquidity, highlighting a diversified access to funding and a strong lender community [12][14] - The company noted that tax refunds do not appear to be a significant headwind to loan balances, and consumer demand remains strong [22][23] - Management emphasized the importance of existing customer credit history for future lending decisions, which helps mitigate risks [24] Other Important Information - The company has locked in a ladder of liabilities extending 26 years into the future, with a weighted average cost of unsecured debt financing at 4.68% as of December 31, 2025 [12][15] - The company has avoided software investments, maintaining less than 3% exposure compared to the BDC average of around 22% [8][35] Q&A Session Summary Question: Impact of tax refunds on loan balances and strategy regarding Tower - Management indicated no plans to exit Tower, citing strong performance and tax advantages as a regulated investment company [19][20] - Tax refunds are not expected to significantly impact loan balances, and consumer borrowing patterns remain consistent [22][23] Question: Stability of convertible prep product line amid market changes - Management noted that interest rates are a significant factor, with a shift towards fixed-rate investments becoming more appealing [26][27] Question: Consideration of entering the software sector - Management expressed caution regarding software investments, emphasizing a focus on their own underwriting standards and avoiding high-risk loans [32][35]

Core Insights - The Kentucky Derby represents the pinnacle of elite horse racing, but for investors seeking lower-correlated assets, the Claiming Game offers a more accessible alternative [1][2] Investment Opportunities - The "Industrial" circuit at U.S. racetracks provides a high-speed business model for DIY investors, focusing on quick returns rather than the prestige of Triple Crown races [2] - A $10,000 investment in a claiming partnership allows investors to secure a 5% stake in a stable of five horses, providing diversification and regular racing opportunities every 4 to 6 weeks [5] Tax Efficiency - The One Big Beautiful Act (OBBBA) of 2025 has made racehorses a highly tax-efficient investment, allowing for 100% bonus depreciation, which enhances the appeal of claiming horses as an alternative asset [6]

Core Viewpoint - American Century Diversified Municipal Bond ETF (TAXF) offers tax-efficient exposure to the U.S. municipal bond market through an actively managed approach that balances investment-grade and high-yield issuers [1] Investment Strategy - The strategy aims for consistent federally tax-exempt income by dynamically allocating across sectors, states, credit tiers, and structures while managing duration and liquidity to balance rate and credit risks [1] - The portfolio can adjust towards attractive spread opportunities when valuations are favorable and become more defensive during deteriorating credit conditions, aiming to smooth income through prudent diversification [1] Market Characteristics - Municipal bonds generally exhibit interest-rate sensitivity and episodic spread volatility; higher-yield segments can enhance income potential but also increase drawdown risk, particularly during risk-off periods or tightening cycles [1] - High-quality revenue and general obligation bonds tend to provide resilience in the portfolio [1] Use Cases - TAXF can serve as a core tax-aware income component in taxable accounts, a diversification complement to corporate bonds and Treasuries, or a satellite allocation to improve after-tax yield [1] - Suitable investors include high-bracket households seeking steady tax-exempt income and multi-asset allocators constructing liability-aware income ladders [1] Risk Consideration - One risk to monitor is exposure to lower-rated or thinly traded issues, where liquidity and price discovery may be challenged in stressed markets [1]

Core Viewpoint - AllianceBernstein has launched the AB US Equity ETF (NYSE: XCHG), an actively managed ETF aimed at long-term capital growth, reflecting the firm's commitment to innovative investment solutions [1][2]. Company Overview - AllianceBernstein is a leading global investment management firm with $865 billion in assets under management as of November 30, 2025 [5]. - The firm offers diversified investment services to institutional investors, individuals, and private wealth clients across major world markets [5]. ETF Launch Details - The AB US Equity ETF (XCHG) is designed to invest at least 80% of its net assets in equity securities of U.S. companies [2]. - The ETF was developed in collaboration with the Bernstein Private Wealth Management team, showcasing the firm's investment expertise [2]. - XCHG is part of AllianceBernstein's growing U.S. lineup of 23 ETFs, which collectively manage just over $13 billion in assets as of the launch date [3]. Investment Strategy - The investment objective of XCHG is to seek long-term growth of capital, utilizing a holistic approach to investment management that emphasizes tax efficiency and strategic asset allocation [3]. - The firm integrates industry-leading research and sophisticated modeling to optimize client portfolios for greater diversification while minimizing tax impact [3].

Core Insights - The critical age for retirees regarding required minimum distributions (RMDs) is age 73, at which point individuals must start withdrawing from tax-deferred retirement accounts like traditional IRAs or 401(k) plans [1] Group 1: Tax Implications of RMDs - All RMDs are taxable income once withdrawn from tax-deferred accounts, regardless of subsequent use [4] - Nine states do not tax income, providing potential tax advantages for retirees receiving RMDs [4][5] - Four additional states do not tax retirement income, allowing retirees to avoid state taxes on RMDs [6][9] Group 2: Reinvestment Options for RMDs - Retirees cannot roll over RMDs into another tax-advantaged retirement account, leading many to invest in taxable brokerage accounts [6] - An exception exists for reinvesting RMDs into a Roth IRA, provided eligibility requirements are met [7] - RMDs can still be invested in tax-efficient ways, such as Roth IRAs or Health Savings Accounts (HSAs), which offer significant tax advantages [8]

Core Viewpoint - Dimensional Fund Advisors has received regulatory approval to adopt a dual share class fund structure, previously exclusive to Vanguard, which is expected to save investors billions in taxes [1][2]. Group 1: Regulatory Approval and Fund Structure - Dimensional has been granted exemptive relief to offer dual share class funds, allowing the addition of exchange-traded fund (ETF) share classes to 13 of its US equity funds [2]. - The approval marks a significant moment for the $13 trillion US ETF industry, as many money managers have seen substantial outflows from mutual funds to more tax-efficient ETFs [3]. Group 2: Industry Impact and Future Prospects - The dual share class fund design, created by Vanguard over two decades ago, has now become available to other firms following the expiration of Vanguard's patent in 2023 [4]. - Over 75 other firms are currently seeking permission from the SEC to utilize the dual share class model, indicating a potential wave of future approvals [4]. - Analysts predict that the approval could lead to a surge in new ETFs, potentially altering the tax implications and performance of numerous mutual funds, and may facilitate greater access to ETFs within the American retirement system [6].

Core Insights - Municipal bonds have experienced a rally, with yields dropping and ratios tightening, indicating a positive response from the tax-exempt market after being labeled "cheap" for months [1] - The current market presents an opportunity for investors to reassess the role of municipal bonds in their portfolios, focusing on stability and income rather than seeking immediate exits [2] Group 1: Market Dynamics - The municipal bond curve remains historically steep, allowing investors to earn more income by investing in longer maturities, particularly in high-quality bonds [3] - Intermediate exposures provide a balance between interest rate sensitivity and attractive yields beyond 10 years, while strategies that span the full range of maturities or focus on the long end of the curve present the strongest value [4] Group 2: Tax Efficiency - Long-term municipal bonds can yield equity-like returns with significantly less volatility, especially in high-tax states like California and New York, where tax-equivalent yields can compete with stock market returns [5] - The break-even federal tax rate, which includes federal income tax, Medicare tax, and state income taxes, highlights the appeal of long-term munis for tax-efficient income, particularly for investors in higher tax brackets [6] Group 3: Short-Term Strategies - The front end of the municipal curve is currently rich, driven by demand from separately managed accounts and retail buyers favoring short-duration, high-grade bonds, yet short-dated credit still offers meaningful yield pickup through credit spreads [7]

Core Insights - Interactive Brokers has launched a tax-efficient Investment Savings Account (ISK) in Sweden to help investors manage their investments and reduce tax liabilities [1][2][6] - The introduction of the ISK is part of the company's strategy to expand its presence in the Swedish market and attract a diverse range of clients [2][6] - The stock price of Interactive Brokers is currently $69.79, reflecting a 1.42% increase, with significant volatility observed over the past year [4][6] Company Developments - Brody Paul Jonathan, the CFO, sold 15,477 shares of Class A common stock at $65.74 each, while retaining 29,870 shares [3] - The current trading volume for Interactive Brokers is 4,136,642 shares, indicating active investor interest [5] - The company's market capitalization is approximately $118.08 billion, underscoring its substantial presence in the financial market [4]