Supply/Demand Imbalance Provides Favorable Backdrop for Munis
During the quarter, the municipal bond market continued to benefit from steady inflows into municipal bond funds, while new issuance remained manageable. This supply/demand imbalance, which has persisted for much of this year, once again provided a favorable backdrop for another quarter of solid returns, with the Bloomberg Barclays Municipal Bond Index posting a quarterly return of 1.42%. With municipalities continuing to benefit from record amounts of federal stimulus and an improving economy, investors are continuing to embrace risk. It was the longer-dated and lower-rated bonds that produced the best relative performance, while shorter dated bonds and bonds with the highest quality ratings produced the lowest relative returns.
The commentary is the opinion of the subadviser. This material has been prepared using sources of information generally believed to be reliable; however, its accuracy is not guaranteed. Opinions represented are subject to change and should not be considered investment advice or an offer of securities.
All investments carry a certain degree of risk, including possible loss of principal.
Past performance is not indicative of future results.