Tag Archives: municipal bonds
Tracking Munis in Uncertain Markets
As uncertainties around tariffs, inflation and interest rates continue to make headlines, how are yield seekers viewing munis? S&P DJI’s Jennifer Schnabl and Vanguard’s David Sharp discuss key performance drivers of munis in challenging markets.
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Fixed Maturity in Focus: Constructing a Ladder for Stability and Yield
As fixed income index solutions continue to evolve, one notable innovation has been that of fixed maturity indices. Fixed maturity indices have existed in the U.S. for over 10 years, where growth and adoption have increased over that time. The market is newer in Europe, where adoption has taken shape over the last 12 months….
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Measuring Munis: Using Indices to Assess Yield Opportunities
How are muni indices helping market participants navigate the yield curve in the current climate? S&P DJI’s Jennifer Schnabl and Vanguard’s David Sharp take a closer look at the S&P Intermediate Term National AMT-Free Municipal Bond Index and S&P California AMT-Free Municipal Bond Index.
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Seeking Shelter in Short-Term Municipals
As has been the case for most of 2023, markets continue to grapple with the notion of whether the Fed will maintain its plan of “higher for longer.” Last week’s release of strong economic data (improved GDP expectations and strong unemployment) exacerbated selling in longer-dated treasuries, sending yields higher. As a result, U.S. Treasury bonds…
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Good Things Come in Threes: Muni Bonds Appear Ripe for 2023
With one month down in 2023, let’s track the performance of municipal bonds so far: as of Jan. 31, 2023, the yield for the S&P National AMT-Free Municipal Bond Index was at roughly 3% (3.02% to be exact). The total return was up about 3% for January (2.87% to be exact), putting a dent in…
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Why Reach for Yield When You Can Use a Ladder?
The current low interest rate environment is forcing many investors to reassess their risk tolerances. Typically, fixed income investors have three main options when trying to “reach” for yield: 1. Move down in credit quality (i.e., take on more credit risk); 2. Increase duration (i.e., take on more interest rate risk); or 3. Move to…
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Municipal Bonds Are Being Left Behind
Corporate bonds have garnered a lot of attention lately, as the Federal Reserve continues to stabilize markets by establishing multiple facilities that support both the primary and secondary corporate bond markets. As a result, credit spreads have tightened significantly from where they were in March. Since March 23, 2020, the option-adjusted spread on the S&P…
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Federal Reserve Becomes Buyer of Last Resort
In a previous blog, we discussed the U.S. Federal Reserve’s initial responses to the current market volatility and resultant dislocations. In short, dropping rates to 0% and adding over USD 1 trillion to the funding markets did little to abate the severity of the situation. In an effort to prevent a liquidity crisis from turning…
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Rieger Report: Municipal Bond ETFs – 10 Years of Growth
The first Exchange Traded Funds (ETFs) tracking municipal bonds were launched in September 2007. Since then the municipal ETF market has grown to 40 ETFs representing over $30.5billion in assets under management. Municipal Bond ETF Market Snap Shot: 40 ETFs all but one represents tax-exempt municipal bonds. There is one ETF tracking taxable municipal bonds….
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Rieger Report: Munis Show Their Power in Low Rate Environment
The 2017 low interest rate environment has created a wonderful example of the power of tax-exempt bonds. On a nominal return basis, investment grade corporate bonds tracked in the S&P 500 Investment Grade Corporate Bond Index have outperformed tax-exempt bonds tracked in the S&P National AMT-Free Municipal Bond Index. By considering the tax implications, using…
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