Fox Business
Expand
Browse All Video
Watch Live

You're watching...

How to Invest in the Muni Market Today

Details

  • Description

    Nuveen Asset Management CIO John Miller gives tips for investing in muni bonds.

  • Duration 3:20
  • Date

Clips

Also in this playlist...

Latest Video

Auto-advance: ON

Auto-advance
View All

Transcript

This transcript is automatically generated

Seven Harrisburg Pennsylvania to Sandra -- California growing number of cash strapped cities are filing -- considering filing for bankruptcy protection.

So -- this damper investor demand for Muni bonds joining us now John Miller co head of fixed income fund with new -- asset management.

John -- taking the time to view it as you know seems to be like the cool thing to do these days well we can't figured out we're just filed for bankruptcy.

Well I think -- it highlights these recent bankruptcy highly filings.

Highlight some of the idiosyncratic risks that are in the Muni market and they also highlight the fact that while the economy overall is improving.

And general macro trends in the Muni market have been stabilizing and improve and there's still local GO communities that are still struggling from the stresses there were created from the real estate market.

Meltdown and some of the cuts cutbacks that the state level.

-- that being said I mean do we presume that these towns cities and municipalities.

Are going to well get bailed out and so as a result.

Buying -- bond is actually sure I think.

-- you cannot assume that these individual cities are gonna get bailed out in fact.

There -- that there is.

A differing.

Sets of examples across the country for example in Pennsylvania -- something called -- 47 where.

Pennsylvania has been trying to help cities like -- -- Harrisburg.

Recover whereby in in California that has not been the case California communities have.

Suffered from the state level cutbacks -- I I wouldn't say that there's a bailout.

In the works in night in California so it's very yeah it's very diverse and very case by case analysis is required yeah that's the hard part about.

Investing in the Muni world because it really is case by case -- -- city.

You know we're also seeing a lot of municipalities call their bonds -- basically they're doing a lot of refinancing so what does that do to a Muni bond holder.

That's another thing that Muni bond investors need to be aware of and that is the call risk and I -- risk has really risen to.

A heightened a heightened trend.

Thus far this year where municipalities.

Are either having called already about 200 billion dollars worth of bonds -- today.

Probably another 10050.

Billion.

Yet to come between now and the end of the year and that creates reinvestment risk swear.

Investors looking for tax income of gotta go back into the market looking for those reinvestment opportunities.

Right which -- brings you back to a question I keep asking why why aren't just by eighteen T stock take the 5% dividend yield in.

Get rid of all this and unnecessary risk.

Well I think the you know certainly that's that's.

A component potentially of a of an overall portfolio as well some of the advantages in Munis though.

Continue to be that the volatility of the overall market -- thing coming down the performance.

Has been going up -- -- performance.

And you also have attractive.

Tax adjusted returns and risk adjusted returns in the Muni market rates are not necessarily correlated to to many of the other major markets he might already have investments -- And there is it was a risk that -- -- could cut its -- dividend John -- -- -- asset --

Load More