Recently, and this is going back over the last two months, there has been significant headline risk in fixed-income and the markets in general.
Beginning with Bernanke’s comments about federal reserve tapering come the end of the third quarter of this year, as well as the bankruptcy filing of the city of Detroit. It has produced some dislocation in the municipal marketplace but it has also created some opportunity.
Over the last nine to twelve months, interest rates in the muni market have risen anywhere from one to one and a half percent, meaning that there are terrific entry-point opportunities in the marketplace now that haven’t existed in the better part of two, two and a half years.
You might ask yourself where on the curve, or what kind of credits should I be interested in? Generally speaking, the intermediate part of the municipal yield curve remains very steep and it remains a point of opportunity, in my view, for anybody thinking about a new spot, a new time to invest in the municipal marketplace.
The ETFs that are managed by Market Vectors encompass the entire spectrum of investment-grade credits. With some of the better opportunities currently in the A-rated and triple-B rated part of the credit spectrum, you can be certain that the ETFs Market Vectors manage also encompass those types of opportunities.
SIFMA’s Letter to the Michigan Governor on GO Bonds
As you know, the city of Detroit declared bankruptcy in the middle of July. The emergency manager that has been installed by the governor of the state of Michigan made some comments with regards to how he was going to proceed with negotiations to hopefully bring the city of Detroit out of bankruptcy. Included in some of those comments were representations about the standing of creditors, as well as bondholders, in terms of who was going to get paid and how they were going to get paid. This, amongst other comments made, raised some significant concerns amongst bondholders, as well as SIFMA.