The recent lack of movement in Treasury yields has caused municipal bond fund prices to stagnate.
Municipal bond funds may slightly be feeling the effects of negative headlines coming from Puerto Rico’s financial problems.
Beyond the headlines about credit troubles in Puerto Rico and Chicago, there is a lot to like about the municipal bond market.
Puerto Rico’s problems are not systemic and will likely remain contained inside Puerto Rico unless retail investors overreact.
Most fund managers agree that economically strapped Puerto Rico won’t drag down the entire municipal bond market. Neither will Chicago, says portfolio manager Dawn Daggy-Mangerson.
Stocks edged up slightly in midday trading Tuesday over hopes that an 11th hour debt deal may save Greece from default.
The yield on the benchmark 10-year Treasury bond may only be 2.4%, but it has come a long way toward fair value in just two short months.
The yield on the benchmark 10-year Treasury bond has climbed above 2.3%, up from 1.7% in January.
A surge in new municipal bond issuance is creating an opportunity for buyers, said Jim Grabovac, Portfolio Manager for the McDonell Intermediate Municipal Bond Fund.
Investors seeking to increase their exposure in the beaten-down energy sector should buy the Nuveen Energy MLP Total Return (JMF).