Municipal debt yields are back to a half-century low, but muni bond exchange traded fund investors have not been dissuaded by the prospect of ultra-low payouts.
Yields for muni debt securities are back to their lowest level since 1965 as a rally in safe-haven assets bolstered demand, reports Brian Chappatta for Bloomberg.
The yield on a Bond Buyer index of 20-year municipal general-obligation bonds dipped to 3.27% last week, mirroring rates in December 2012 and the lowest since 1965. Yields on top-rated 10-year munis were also at 1.6%, just above the lows hit in late 2012.
Looking at muni ETF yields, the intermediate-term iShares National AMT-Free Muni Bond ETF (NYSEArca: MUB) has a 1.34% 30-day SEC yield, SPDR Nuveen Barclays Municipal Bond ETF (NYSEArca: TFI) has a 1.63% 30-day SEC yield, Market Vectors Intermediate Municipal Index ETF (NYSEArca: ITM) has a 1.66% 30-day SEC yield and Vanguard Tax-Exempt Bond Index Fund (NYSEArca: VTEB) has a 1.53% 30-day SEC yield.
As yields fallen off, munis have been outperforming. Year-to-date, MUB rose 1.3%, TFI gained 2.0%, ITM increased 2.2% and VTEB advanced 1.2%.