TXXI targets delivering after-tax income while preserving capital through a diversified blend of US dollar-denominated fixed income assets, including municipal and taxable bonds. The fund allocates more than half its portfolio to municipal bonds with federal tax exemption, complemented by investments in government and corporate securities to ensure balanced exposure. Through assessment of credit quality and potential after-tax returns, it maintains a portfolio duration between 4 to 8 years to manage interest rate sensitivity. Tactical sales enhance tax outcomes, focusing on sustaining holding periods that mitigate tax impacts from short-term gains, while offsetting gains with losses to maximize tax efficiency. Additionally, the fund leverages diverse security types, aiming for an optimal blend of stability and return across different market environments.