jahowle

Three Bond Classes: Year-to-Date Returns

Brett: A good observation but the question is why? Why do high grade municipal bonds on the intermediate and long term part of the curve out yield Treasurys?
Why has the intermediate portion of both the Treasury and muni curve out performed the long end? The muni/treasury relationship has created what I feel are rare opportunities in muni bonds. If you want to put on an abritrage trade then you can buy PZA (a muni ETF) and buy TBT ( a short treasury ETF) and wait for the spread to collapse.