• Muni Nation

    June 2013

    by James Colby, Portfolio Manager

    Colby is a Senior Municipal Strategist with more than 30 years of fixed income experience, responsible for Market Vectors municipal bond investments.


    The “Category F5 Tornado” Has Passed

    Traders are telling me, in so many words, that they are beginning to touch solid ground (perhaps with only their toes) and set bids in today's market in the wake of the selling frenzy which occurred yesterday. The recalibration of the AAA yield curve for municipals reveals a nearly 100 basis point adjustment to 30 year yields from the end of April.

    AAA Municipal Yield Curve 

    AAA Municipal Yield Curve graph  

    Ratios of municipal bond yields to Treasury yields are in most cases above 100% as illustrated in the table below. I believe there is potential value in this market that I have not seen in over two years.

    AAA MMD Yields  vs. Treasuries table