Colby is a Senior Municipal Strategist with more than 30 years of fixed income experience, responsible for Market Vectors municipal bond investments.
I've taken a little liberty with a familiar saying to suggest that for municipals, I am not booking my three-month summer vacation just yet. Month-to-date and year-to-date performance of all muni high-yield bond sectors (with the exception of tobacco) has been positive. The technicals of demand overpowering supply, which I've previously written about, are still in place. The table below lists the six states with the largest June 2012 cash flows1 into munis.
June 2012Actual Cash Flow
June 2011Average Cash Flow
Source: Siebert Brandford Shank & Co. Municipal bond calls as of 5/25/12. Subject to change as more bond calls are announced.
The municipal market appears to be looking for evidence of improvement of any variety. I believe that:
1Cash flow is the sum of maturities, coupon payments and bond calls. This is considered representative of money available for reinvestment back into municipal bonds at a given time.2The Barclays Capital Municipal Bond Index is considered representative of the broad market for investment grade, tax-exempt bonds with a maturity of at least one year. The Barclays Municipal AAA, BBB and High-Yield Bond Indices are subsets of the broader index.
Market Vectors High-Yield Municipal Index ETF
Market Vectors Intermediate Municipal Index ETF
Market Vectors Short High-Yield Municipal Index ETF
Market Vectors CEF Municipal Income ETF
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