3rd Quarter 2015 Municipal Market Performance and Highlights
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- The Barclays Municipal Bond Index returned 1.65% for the three months ended September 30, 2015, bringing the year-to-date total return for the
- index to 1.77%.
- Municipal bond yields followed U.S. Treasuries lower, as global economic weakness, volatile equity markets, and the Federal Reserve's ("Fed")
- September decision to postpone tightening drove a flight-to-quality rates rally. The 10- and 30-year U.S. Treasury rates fell 29 basis points (bps) and
- 24 bps, respectively, to 2.06% and 2.87%.
- New issue supply was lighter due to seasonal softness and declining refinancing volume as yields remained elevated into August versus those at the
- start of the year. For the first nine months of the year, municipal bond issuance totaled $312.5 billion to outpace 2014 issuance during the same period
- by 34.6%, well below the 44.9% year-over-year pace set during the first half of 2015. (Source: Barclays, SIFMA)
- Net mutual fund flows remained modestly negative for a fifth consecutive month compressing total net inflows year-to-date through September 23,
- 2015 to $4.5 billion from $6.8 billion at the end of June 2015. (Source: Barclays, Investment Company Institute)
- Credit fundamentals remained healthy as first time defaults continued to trend lower and state and local government tax revenues surged higher.