Fears of massive default in muni market never materialized in 2011. Several funds were mentioned in article - "Fidelity Intermediate Municipal Income (3.35 percent yield; $10,000 minimum; 0.39 percent expense ratio) and Vanguard Intermediate Term Tax-Exempt (3.51 percent yield; $3,000 minimum; 0.20 percent expense ratio) earn high marks from fund research firm Morningstar. Another option is the iShares S&P National AMT-Free Bond Fund, the biggest exchange-traded fund tracking municipal bond debt".
http://www.bloomberg.com/news/2012-01-17/no-muni-miracle-for-2012-though-yields-are-enticing.html
Comments
USAA offers three national munis USSTX (Short Duration...yielding 2.62%), USATX (Intermediate Duration...yielding 4.14%), and USTEX (Long Duration...yielding 4.56%). The other dynamic with any kind of bond fund is the fund price. It can appreciate in downward moving interest rate environments and depreciate in upward moving interest rate environments.
Over the past year all three funds have enjoyed price appreciation as well as yield. This is, in part, due to the major hit munis took in 2010. I usually don't use Yahoo Finance chart tool because it reflects only price changes in a fund. Morningstar charts incorporate both price and dividends (capital gains) and therefore is a better comparison chart tool.
In the case of comparing bond fund prices I like to track these three funds together using Yahoo finance. Since yield is predetermined (see above), price is what an investor can adjust their allocations to. I like to allocate more of my muni money to the longer duration bond (USTEX) when prices are appreciating and move back to the shorter term muni (USSTX) when the trend reverses.
Charting these three funds together can give you this information because the longer term duration will reverse (cross over the intermediate fund first and then cross over the shorter term bond), sometimes very quickly . To me this is trend following strategy I use for bonds...lengthen my duration at times...shorten duration at time.
Here's the yahoo chart for these three funds. Remember this is only a price chart not the actual value chart (price + dividend). Change the time frame and move the scroll bar to observe the the crossovers. The price trend for muni has been really strong lately...the 1m,3m and 1 yr performance has been outstanding. The 2 YR and 5 YR paint a different story.
http://finance.yahoo.com/echarts?s=USTEX+Interactive#chart10:symbol=ustex;range=1y;compare=usstx+usatx;indicator=dividend+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
Not sure...maybe someone else will chime in.
credit market brief news
https://www.google.com/#sclient=psy-ab&hl=en&site=&source=hp&q='Risk+On'+Aids+Corporates,+Lifts+Safe-Haven+Yields+&pbx=1&oq='Risk+On'+Aids+Corporates,+Lifts+Safe-Haven+Yields+&aq=f&aqi=&aql=&gs_sm=e&gs_upl=996l996l0l2159l1l1l0l0l0l0l167l167l0.1l1l0&bav=on.2,or.r_gc.r_pw.,cf.osb&fp=694e8924650858ea&biw=1366&bih=537
Thanks for the article JohnN...
If you click on the link I provide here you can see the reversal your article alludes to...may be time to move back into shorter duration munis:
Adjust the time frames (1M, 3M, 1 YR,3 YR, 5 YR) to compare the price performance of short duration (USTTX), intermediate duration (USATX, and long duration (USTEX).
http://finance.yahoo.com/echarts?s=USTEX+Interactive#chart10:symbol=ustex;range=1y;compare=usstx+usatx;indicator=dividend+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined