Chart: What drives return in the muni market

[ "Blog: Latest Insights" ]
[ "Fixed Income", "Tax Efficiency" ]
[ "Catherine Stienstra" ]
  • Chart on the Go

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The latest #chartonthego highlights the primary sources of return in the municipal bond market over the past decade.*

Winners in the muni market vary each year
  • Duration risk and credit risk are the primary drivers of income and total return in the muni bond market. These factors may outperform at different stages of the economic cycle.


  • Allocating across maturity and quality spectrums could uncover more opportunities. Shorter duration, high-quality municipal securities could offer stability during periods of heightened volatility. But longer and lower quality bonds could provide a significant yield advantage that bolsters total return potential. Blending these exposures with a core allocation to bonds of targeted maturities and qualities may smooth the ride for investors.


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