Muni Bond News: MS Eyes ESG, Yields Climb, Disclosures Trading Boost

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  • 01 mins 23 secs
Morgan Stanley sees the muni bond market as ripe for sustainable investing. New research finds that that valuations are still driven largely by the issuer’s credit rating, without a premium for ESG. But as credit risk and environmental and social factors becomes harder to ignore, Strategist Samantha Favis thinks this could impact bond performance.

Next, as rates rise, munis are experiencing more weakness. On August 19th, Bond Buyer reported that one-year muni yields climbed 50 basis points in just one week, sparking a sell off on the short end of the curve and pushing short ratios higher.

Finally, Financial disclosures DO matter to muni investors it seems- especially retail investors. Brookings Institute studied hundreds of thousands of disclosures and found that trading activity increases by 2-3% around filings, calling it "a small but meaningful increase."
Channel: Municipal Bonds

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