Seeking Alpha

Time to buy munis?

  • The municipal market is about to enter an extended period of recovery, says the team at BMO Capital, noting the recent weeks have been the 3rd significant period of stress over the past 5 years - the first being post-Lehman and the other being the post-Whitney default warning.
  • This time it's the big jump in Treasury yields amplified by the Detroit bankruptcy which pushed muni spreads to Treasurys to their highest in a year - unusual action as higher rates bringing on tighter spreads is typically the norm.
  • Municipals often have their best performance after such periods.
  • ETFs of note: MUB, SUB, MUNI, PVI, PZA, SHM, TFI, VRD, HYD, ITM, MLN, PRB, SMB, GMMB, SMMU, RVNU.
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