This document, entitled “Opportunity in Munis” addresses the recent municipal market downdraft and identifies the compelling the value in municipal securities.
Specifically, the report expands upon the following:
• The rapid increase in yields of the past two months, and in particular last week, is the sharpest adjustment since the days immediately following the Lehman bankruptcy in 2008.
• Some observers warn that the recent market reversal signals the beginning of the “Great Rotation,” a kind of seismic shift in investor sentiment from fixed income to equity. We disagree.
• Although we have likely seen the cyclical low point in long term interest rates and we expect increased volatility such as last week’s action surrounding the Fed’s communication, if the economy continues its path of modest growth, as we expect, interest rate increases will be gradual.
• At current levels, tax free yields are as attractive as we’ve seen since 2011. Investors should take advantage of recent volatility to add to municipal positions using a laddered portfolio approach.
To access this report, please click here. Please note that this access is for members only and requires a password.
