Some of the Biggest Names in Muni Bonds are favoring the tail end of the curve. Long dated municipal bonds have received recent endorsements from strategists at Bank of America, Barclays, Nuveen, and Vanguard, among others, as SHORT-TERM muni yields have experienced significant volatility in the first quarter of the year, are offering yields below their 10-year median, and are considered expensive when compared to US Treasuries.  

Bank of America’s Yingchen Li suggested investors, “Buy long-duration high-grade bonds, especially 4% coupons,’  in order to “extend duration for the strongest returns going forward.”

And investors seemed to have already caught on. Bonds with maturity dates of 22 years or more are up 4% for the year and have outperformed all other durations.  

In the wake of the collapses of Silicon Valley Bank and Signature Bank, the Federal Deposit Insurance Corporation, engaged BlackRock to sell approximately $114 Billion dollars worth of securities seized from the two failed banks. $87 Billion from SVB and $27 Billion from Signature Bank. 

Included in the assumed securities was a $7 billion dollar muni portfolio from SVB and a $270 million dollar portfolio from Signature Bank. 

Alliance Bernstein released its Capital Markets Outlook for the 2nd quarter of 2023. On the topic of fixed income, the report pointed out that interest rates continue to drive markets, entry points for bond yields are near 10 year highs for much of the bond market, muni credit upgrades are still outpacing downgrades, and that investors should not try to time the market when it comes to trying to maximize entry point yields.