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Thanks for posting the Schwab Municipal Bond Outlook. I have a small representation of muni's in my income sleeve and was wondering when might be a good time to add to the position. I'd like to build it to where it is about 5% of the sleeve. In 2016, the fund was about a break even position as it's nav dropped about the same as it paid in interest. Since, it is held in a taxable account the income was not taxable for me while it put an unrealized loss on my books which will be a tax loss benefit should I choose to sell.
Comments
Thanks for posting the Schwab Municipal Bond Outlook. I have a small representation of muni's in my income sleeve and was wondering when might be a good time to add to the position. I'd like to build it to where it is about 5% of the sleeve. In 2016, the fund was about a break even position as it's nav dropped about the same as it paid in interest. Since, it is held in a taxable account the income was not taxable for me while it put an unrealized loss on my books which will be a tax loss benefit should I choose to sell.
Thanks again for posting the outlook.
Skeet
Highlights of the Week:
Municipals: The municipal market continued to see heavy mutual fund outflows over the holiday period; however, municipal/Treasury ratios actually rallied, and the market delivered strong positive performance for the month of December. With limited supply and strong demand in the new year, we expect the “January effect” to provide support for municipals in the coming weeks.
Corporates: Corporates started the year with a bang with heavy issuance right out of the gate. Total new issuance for the week was $53 billion,
well above the $20-$25 billion anticipated for the week and reflective of strong sentiment among issuers. Last year was the heaviest year of
issuance ever, but 2017 is forecast to decline by 5-10% by many analysts.
High Yield: In recent years, high yield issuers have taken advantage of low rates to refinance their balance sheets. As a result, only 2% of the high yield universe will mature in 2017. Headed into the new year, we believe this financial cushion will provide a measure of security for the asset class.
Treasuries The 5/30 yield curve remained flatter and close to the lows of the past 12 months at 107 bps. Two rate hikes are currently 100% priced in for 2017, with the Fed’s “median dot” signaling three hikes.
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https://www.payden.com/weekly/wir010617.pdf