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Fiera Capital Tax-Efficient Fixed Income 1st Quarter Market Commentary

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Includes: AFB, BAF, BBF, BBK, BBSA, BFK, BIL, BKN, BLE, BSD, BYM, CLTL, CXH, DFVL, DFVS, DLBL-OLD, DLBS, DMB, DMF, DSM, DTF, DTUL, DTUS, DTYL, DTYS, EDV, EGF, EIM, EIV, EOT, EVN, EXD, FIBR, FLMB, FMB, FMN, GBIL, GOVT, GSY, HYDD, IEF, IEI, IIM, IQI, KSM, KTF, LEO, MEN, MFL, MFM, MFT, MHD, MMU, MNP, MQT, MQY, MUA, MUB, MUE, MUH, MUS, MVF, MVT, MYD, MYF, MYI, MZF, NAD, NEA, NEV, NIM, NMI, NUV, NUW, NVG, NXP, NXQ, NXR, NZF, OIA, OPER, PBND, PLW, PMF, PML, PMM, PMO, PMX, PRB, PST, PVI, PZA, RINF, RISE, RVNU, SCHO, SCHR, SHV, SHY, SPTI, SPTL, SPTS, TAPR, TBF, TBT, TBX, TFI, TLH, TLT, TMF, TMV, TTT, TUZ, TYBS, TYD, TYNS, TYO, UBT, UDN, USDU, UST, USTB, UUP, VFL, VGIT, VGLT, VGM, VGSH, VKI, VKQ, VMO, VTEB, VUSTX, XMPT, ZROZ
by: FieraCapitalUS
Summary

In early March, we repositioned the portfolios to add a strategic crossover trade in 2-4 year Treasuries.

An interesting trend seen in the quarter was the spread compression and outperformance of bonds from high-tax states.

In the first quarter of 2019, strong demand emerged as the leading narrative and technical forces were meaningfully supportive of municipals.

In this commentary, Kenneth Potts and Bryan Laing, CFA, review the first quarter of 2019 and examine our outlook and positioning for the months ahead.

Overview of 1st Quarter:

  • Treasuries rally sharply after Fed takes a dovish turn
  • Municipals outperform Treasuries on strong demand
  • Opportunity develops to implement a "crossover trade"
  • Noteworthy developments from the Puerto Rico restructuring

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.