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Despite Strong Muni Market, GO Munis Turn Risky: BlackRock

NEW YORK CITY—The muni bond market is now questioning the willingness and ability of some issuers to make payments on general obligation bonds says BlackRock's Peter Hayes.

By Natalie Dolce | nataliedolce | | Updated on June 10, 2016

riskwomantightropemi NEW YORK CITY— Municipal bonds , a favored fixed income asset class among high net worth investors, are experiencing strong demand this year despite the debt troubles of Puerto Rico, New Jersey and Illinois and gains that, unlike last year’s, are lagging those of Treasuries and investment grade and high yield corporate bonds. That is according to GlobeSt.com sister publication, ALM’s Thinkadvisor.com . According to their recent article on the subject, flows into muni bond funds topped $22 billion for the first five months of the year, and muni fund assets reached a record high of $632 billion as of June 1. “Demand from foreign borrowers seeking higher yields is adding to demand. Year-to-date investment grade munis have returned just over 3%, capturing most of the gains that locally based BlackRock’s Municipal Bonds Group had been expecting for the full year,” the article states. To read the full article on the subject on Thinkadvisor.com, click here.

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