- After growing cautious on municipal bonds at the beginning of the year, there are reasons to be more optimistic going forward.
- The recent stimulus bill limits the credit risk, especially for investment grade munis, with a lot of support going to state and local governments.
- Monthly flows into muni funds remain positive, illustrating this is still a sector that is in favor.
- While credit risk is muted, interest rate risk is a major concern. With many muni funds having high duration levels, I made a swap into the lower duration alternative.
For further details see:
Why I Still Like Munis But Recently Made Some Portfolio Adjustments