Strong technical factors driving the municipal market in the past are now being upended.
Over the last decade, portfolio managers increasingly turned toward high yield bonds in search for alpha. Going down the credit spectrum in search for yield proved to be a winning strategy. As a result, credit spreads declined to near all-time lows at the start of 2020. However, recent market concerns over the impact of the coronavirus have pushed treasury yields to all-time lows. With the rising risk of a global recession, investors are now fleeing risky assets.
Access the full report to find out:
- What’s driving the municipal market?
- How have municipal credit fundamentals performed?
- What happens in the next downturn?
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The benchmark 10-year Treasury note dropped below 1% in March
High yield spreads widening from near all-time lows
Demand for Muni Bonds turned negative in March 2020
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