Entering text into the input field will update the search result below

Municipal Sector Market Review

Jan. 03, 2022 6:56 AM ETCMU, NMCO, RVNU, VTEAX, VTEB12 Comments


  • The municipal sector continues to benefit from a strengthening credit environment and a supportive technical backdrop.
  • We discuss some of the key themes of the sector such as the impact of rising short-term rates on leverage costs, a low level of underlying yields and more.
  • We discuss the performance of the sector across different credit sub-sectors, investment vehicles and fund houses.
  • And highlight our stance in this sector via our Municipal Income Portfolio.
  • I do much more than just articles at Systematic Income: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

Page of newspaper with words municipal bonds.

designer491/iStock via Getty Images

This article was first released to Systematic Income subscribers and free trials on Dec. 28.

Tax-exempt municipal holdings form a core of many income portfolios. In this article, we touch on the performance of the sector in

Check out Systematic Income and explore our Income Portfolios, engineered with both yield and risk management considerations.

Use our powerful Interactive Investor Tools to navigate the BDC, CEF, OEF, preferred and baby bond markets.

Read our Investor Guides: to CEFs, Preferreds and PIMCO CEFs.

Check us out on a no-risk basis - sign up for a 2-week free trial!

This article was written by

ADS Analytics profile picture

ADS Analytics is a team of analysts with experience in research and trading departments at several industry-leading global investment banks. They focus on generating income ideas from a range of security types including: CEFs, ETFs and mutual funds, BDCs as well as individual preferred stocks and baby bonds.

ADS Analytics runs the investing group Systematic Income which features 3 different portfolios for a range of yield targets as well interactive tools for investors, daily updates and a vibrant community.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of CMU, NMCO either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (12)

how much more downside to muni cef stock prices ? which to buy after sell off ?
Pablo profile picture
@gutcheck Agree. Need a gut check. Is the March rate hike already baked in?
It never ceases to amaze me, or should I rather say frustrate and enrage me, how a months long grinding advance in muni cef principal can be wiped out and then some in the course of 2-3 bad days.
@cheerless But the distribution stays constant which is where your appreciation in Muni CEFs is going to come from. Embrace the roller coaster to buy at the lows when you have money to invest and sell when you need to at the highs.
With the capital losses (granted on paper) that I've sustained over the past three weeks and especially the past 5 trading days on muni cefs, the distribution offers little solace. In fact I've lost 2 years worth of distributions.
hawkeyec profile picture
@ADS Analytics

Thank you for a first class look at the future of the muni space based on the drivers that are there. My biggest CEF holdings in the muni space are in six Nuveen funds. I have dumped my PIMCO funds, for now at least. Nuveen also now manages the money at TIAA, the source of my largest retirement annuity. My annuity comes from the conservative "traditional (FI)" fund and for the fifth time in 13 years that payment was raised this year, even though this is a fixed annuity. I also have MFS, Invesco, BNY Mellon, Blackrock and a few other misc muni funds as well. As you point out, Blackrock's results are disappointing. I also have ten individual issues. All but one is IG and all are showing prices above what I paid. The interest I am getting from these bonds averages just over 4.5%. In my bracket that is fine, especially since half are now double TE. My worst muni investment is also my largest single portfolio holding, the Vanguard intermediate muni fund. Most of the future you describe for this space is embodied in this fund. Still, TE interest and dividends comprise 25% of my AGI and the amount continues to rise in dollars.
Yes, your chart is very interesting indeed.
ADS Analytics profile picture
@labman106 Glad it's useful. Happy new year!
Extremely comprehensive and well done. Thx
Another great piece. The projected 5 year return on quality muni CEFs of 1% is was a real head-snapper. Thanks again.
RZel profile picture
Excellent analysis on munis. I will take some notes after reading the post second time.
I also like the last chart. Kudos to author.
ADS Analytics profile picture
@zbatia I do think alpha is going to be the differentiator next year. Happy new year!
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!

Related Stocks

SymbolLast Price% Chg
MFS® High Yield Municipal Trust
Nuveen Municipal Credit Opps Fund
Xtrackers Municipal Infrastructure Revenue Bond ETF
Vanguard Tax-Exempt Bond Index Fund Inst
Vanguard Tax-Exempt Bond Index Fund ETF Shares

Related Analysis

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.