Municipal market snapshot: Year-to-date performance drivers and outlook

Portfolio manager Greg Gizzi briefly discusses the main drivers of municipal bond markets thus far in 2014, along with his expectations for the second half of the year.

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so the basis of of the municipal performance so far and 14 the first factor is the interest rate rally we've seen in treasuries in the resumption of the positive technical in the marketplace sunflowers are now positive approximately 5 and 1/2 billion year-to-date in conjunction with the supply picture that again is lower than the previous year were down about 21% year-to-date so the positive supply-demand technical is creating what we call negative net Supply and through the first 5 months of the year that negative messed up lies about 15 billion dollars so that's the basis of the performance here in 2014 since minis are highly correlated to the US Treasury Market treasury rates will have a big factor in how we perform in the back half of this year at approximately the midpoint the market is seeing good Returns the municipal Bond aggregate index is up 5.45% and high yield is up over 9% approximately 9.4% so having having put up good results in the first six months of the year and being able to earn the coupon in the back half of the Year even though we suspect that interest rates may begin to rise in the latter part of the year as the fed and zits tapering program of quantitative easing we do believe that the coupon will more than offset any price tag radiation that may result from higher yields

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