The discount “looks even more compelling when you consider the amount of supply the U.S. Treasury needs to sell over the coming year due to chronic deficits,” the strategist added. Finally, muni bonds could be more attractive to upper income investors due to tax breaks, he said.
In May, Koesterich said the U.S. Treasury market offered “little value” and advised an underweight position in long-term Treasury ETFs. [Treasury ETFs Caught Between Debt Worries, Safety Trade]
iShares S&P National AMT-Free Muni Bond Fund
iShares Barclays 20+ Year Treasury Bond Fund (NYSEArca: TLT)
