Fund sees big opportunity in munis and corporate debt

|By:, SA News Editor

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.