By J.R. Rieger
The S&P Municipal Bond Index has recorded a 4.21% year-to-date total return for the first three quarters of 2016, lagging the taxable corporate bond market returns of nearly 9% as tracked by the S&P 500 Bond Index. Some segments of the municipal bond market are contributing more than others:
- Local general obligation bonds have outperformed state general obligation bonds by 120bps.
- Revenue bonds have outperformed general obligation bonds by 139bps.
- Insured municipal bonds have outperformed investment grade bonds by 79bps.
- The S&P Municipal Bond Puerto Rico Index has returned over 13.4% year-to-date pushing the S&P Municipal Bond High Yield Index to outperform the S&P Municipal Bond High Yield ex-Puerto Rico Index by 130bps.
Table 1) Select municipal bond indices, their year-to-date returns and yields as of September 30th 2016
Source: S&P Dow Jones Indices, LLC. Data as of September 30th, 2016. Table is provided for illustrative purposes. It is not possible to invest directly in an index. Past performance is no guarantee of future results.