Nevertheless, the recent spate of selling pressure and rising yields may provide an opportunity for investors. The muni-to-Treasury ratio has increased and is closer to their one-year maximum than their one-year average.
“The attractive taxable/tax-exempt ratio should continue to capture investor interest and, as such, underpin the market,” BlackRock added.
For instance, MUB has a 1.79% 30-day SEC yield but shows a 3.16% tax equivalent 30-day SEC yield for those in the highest income bracket. ITM has a 2.37% 30-day SEC yield and a 3.92% tax equivalent 30-day SEC yield. TFI has a 2.21% 30-day SEC yield and a 3.9% tax equivalent 30-day SEC yield.
Additionally, we are entering a historically favorable summer period for the munis market, with a net-negative supply potentially re-emerging to help support gains ahead.
For more information on the munis market, visit our municipal bonds category.
Max Chen contributed to this article.