Demand for munis continues to outpace supply and the result is the muni market is reflecting strength from the five year maturity range on out.  On the shorter end of the curve, five year non-callable municipal bonds tracked in the S&P AMT-Free Municipal Series 2019 Index have returned 2.19% just about where the S&P 500 TR is.  In the intermediate part of the curve, seven year non-callable municipal bonds tracked in the S&P AMT-Free Municipal Series 2021 Index have outpaced the equity market by returning 4.41% with yields dropping by 33bps this year.  Slightly longer bonds in the nine year range maturing in 2023 have returned over 6.2% year to date with yields of the bonds tracked in the S&P AMT-Free Municipal Bond 2023 Index dropping by 79bps.

The long end of the bond market continues to enjoy double digit returns.  The S&P Municipal Bond 20 Year High Grade Index has returned just under 12% year to date with yields dropping by 70bps on the year.

In the high yield arena, the S&P Municipal Bond High Yield Index has returned 8.16% year to date more than double the return of its corporate counterpart, the S&P U.S. Issued High Yield Corporate Bond index, which has returned 3.99% year to date.

Keeping an eye on bonds from Puerto Rico, the S&P Municipal Bond Puerto Rico General Obligation Index has returned 12.26% year to date helping to offset a 2013 decline of over 20%.

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