Five Questions With: Diana P. Herrmann

Diana P. Herrmann is the CEO of Aquila Investment Management LLC and president of Aquila Narragansett Tax-Free Income Fund, a municipal bond fund designed for Rhode Island investors.

The fund invests mostly in tax-free, investment-grade municipal bonds, which typically fund infrastructure projects in cities and towns throughout the state. Herrmann talks with Providence Business News about the 25-year-old fund, the organization and what the money has gone toward through the years.

PBN: Congrats on 25 years, how would you describe the last 2½ decades?

HERRMANN: The last 25 years have been very exciting in multiple ways. Not only do we believe that Aquila Narragansett Tax-Free Income Fund has met its investment objective over the past 25 years, but it has also, in turn, served as an important investment option for financial professionals to be able to offer to their clients – assisting their clients to pursue (and, hopefully, meet) their financial goals. Moreover, Aquila Narragansett Tax-Free Income Fund has played a very important role in helping the economic development and quality of life throughout Rhode Island through its investments in locally based, vital infrastructure, thereby benefiting thousands of Rhode Island residents throughout the state. We enjoy having the opportunity to update our shareholders and their financial professionals face-to-face each year at our locally based shareholder meetings on not only the fund’s performance, but also its support of these vital projects.

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PBN: Can you tell our readers a little bit about Aquila Investment Management and what it does? 

HERRMANN: Aquila has developed and managed mutual funds for more than 30 years. Over the years, the Aquila Group of Funds have come to be valued by many shareholders and their financial advisers for what we believe to be our consistent and disciplined investment approach, which emphasizes knowing what we own while striving to preserve and build upon the value of invested assets. We view our decision to have Aquila Narragansett Tax-Free Income Fund managed by a Rhode Island-based investment team as a critical aspect of knowing what we own in Aquila Narragansett Tax-Free Income Fund. Just as importantly, we believe people have come to value and depend upon Aquila’s high level of service for not only our shareholders, but their financial advisers as well. We value their trust and intend to continually strive to maintain it.

PBN: How does Aquila Narragansett Tax-Free Income Fund benefit Rhode Island investors, specifically?

HERRMANN: Aquila Narragansett Tax-Free Income Fund’s investment objective is to provide our shareholders with as high a level of double tax-free income (income exempt from both Rhode Island state and regular federal income taxes) as is consistent with preservation of capital. The fund may only invest in tax-free municipal bonds of investment-grade quality. Municipal bonds provide an efficient means of financing vital projects. Therefore, Rhode Island investors may not only benefit from the tax-free income generated by the fund but also from the economic development and quality of life that is positively impacted by the types of municipal projects in which the fund invests.

PBN: What type of projects has the fund helped finance?

HERRMANN: Aquila Narragansett Tax-Free Income Fund has financed major Rhode Island projects such as the enhancement of T.F. Green Airport and the construction of the Rhode Island Convention Center, Women & Infants Hospital, the University of Rhode Island’s Ryan Center and Bradford Boss Ice Arena, as well as local projects involving Rhode Island’s other colleges and universities (such as Brown University, Bryant University, Johnson & Wales University, New England Institute of Technology and Providence College) and clean water projects throughout the state. We plan to continue to invest in similar types of projects going forward, so long as the bonds meet the investment criteria of the fund.

PBN: Why should investors consider investing with the Aquila Group of Funds over other groups? 

HERRMANN: Aquila Narragansett Tax-Free Income Fund is currently the only fund of its type, specifically designed to provide double tax-free income consistent with preservation of capital, by investing in bonds that are exempt from Rhode Island state and regular federal income taxes. We take pride in knowing that we have been helping Rhode Island investors pursue their financial goals over the past 25 years, and our investors can take pride in knowing that their fund is helping the economic development and quality of life through the fund’s investments in projects in Rhode Island communities.

Eli Sherman is a PBN staff writer.