Chart: What drives return in the muni market

  • #chartonthego

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

Winners in the Muni Marker 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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The Bloomberg Barclays Municipal Bond Index is an unmanaged index that is considered representative of the broad market for investment-grade, tax-exempt bonds with a maturity of at least one year. It is not possible to invest directly in an index.