Fund sees big opportunity in munis and corporate debt


Ten days ago, owning no municipal bonds (MUB) and investment-grade corporate debt (LQD), Sierra Investment Management is buying "with both hands and feet." Behind the decision is Sierra's belief the Fed won't taper for several more months as the sharp increase in mortgage rates deals a blow to housing.

This should send bond yields lower over the next six months, with the 10-year Treasury perhaps returning to under 2%.

"We move tactically, with discipline ... We buy when a category price turns from downward to upward. We believe high-grade corporates and munis are undervalued relative to Treasurys."

Muni ETFs: MUB, SUB, MUNI, PVI, PZA, SHM, TFI, VRD, HYD, ITM, MLN, PRB, SMB, GMMB, SMMU, RVNU, NY.

IG corporate ETFs: LQD, CBND, CORP, FLTR, FLRN, ITR, LWC, SCPB, VCIT, VCLT, VCSH, IGU, IGS, CSJ, QLTA, QLTB, BSCI, BSCJ, BSCK, BSCL, BSCM.

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Comments (3)
  • movies555
    , contributor
    Comments (1402) | Send Message
     
    I don't like to be "that guy", but article says "under 2% on 10yr.
    26 Sep 2013, 11:18 AM Reply Like
  • Bob_B
    , contributor
    Comments (62) | Send Message
     
    Feel any need to attribute this interview to a publication?
    26 Sep 2013, 11:52 AM Reply Like
  • Scooter-Pop
    , contributor
    Comments (4315) | Send Message
     
    Tremendous upside buying the beat down Muni CEFs and ETFs IF you agree Ben does not Taper until late 2014. 10% Equivalent Yields exist for those in the max tax bracket.
    27 Sep 2013, 08:01 AM Reply Like
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