Late last year, while many municipal market participants were predicting a second straight year of negative total returns for municipal bonds in 2014, we called for positive total returns for the full year while recommending that investors focus their attention on the intermediate portion of the yield curve and emphasized an investment orientation in lower investment grade rated bonds. Through the first half of 2014, the Barclays Municipal Bond Index returned 6.0%, including a positive 2.59% during the second quarter of 2014. The Barclays Revenue Bond Index and Non-Investment Grade Index sported even higher total returns of 6.59% and 7.53%, respectively. The FTA High Income SMA generated a total return, net of fees, of approximately 7.33%.
So what happened? What accounts for such strong year-to-date performance? Click here to read the 2nd Quarter Municipal Update.