Best of the Bond Market for March 14th, 2012
Tweet and Video by @blackrock
What Will Drive Muni Market Performance Going Forward? – Our Take: Great video interview of the Head of Municipals for Blackrock (the largest asset manager in the world) Peter Hayes. Here are the highlights:
- There are still lots of good opportunities in the Municipal Market to earn income, which is the focus of most investors in the municipal bond market.
- Municipal Bonds as an asset class remain attractive relative to Treasuries and Other Fixed Income asset classes.
- Significant tax policy change affecting the muni market won’t occur until 2013 and the outcome of the election is going to be a big factor so need to take a wait and see approach there.
- Stress to the weaker local municipalities remains problematic and we are going to see lots of negative headlines continue to come from cities like Stockton CA, Detroit MI, and Providence RI
- While the news is going to focus on the above, bankruptcies in relation to the overall market will remain minimal.
- They are finding the most value in revenue sectors like transportation in healthcare. Especially in the A rating range given their wide spreads.
- Security selection remains the most important element.