The municipal-bond revival

|By:, SA News Editor

Municipal-bond prices have soared so far in 2014, compared to the same time one year ago. 2013 was the markets worst year in almost two decades, after registering losses nationwide - ranging from Detroit's municipal bankruptcy-protection filing to pension costs in Illinois.

The revival of the $3.7T municipal-bond market comes as bond buyers attempt to find higher investment returns amid dropping U.S. interest rates.

Investors have also poured $3.1B into municipal-bond mutual funds this year, compared with $2.9Bn over the same period in 2013.

Municipal bonds have returned 5.8% in 2014, reflecting interest payments and price appreciation.

Yields on municipal debt fell to 2.3% this past Wednesday, which was their lowest in almost a year. Yields fall when prices rise.

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