Perspective for Advisors
According to our regression analysis, over the past 10 years (as of 12/31/2020), the correlation between tax-exempt municipals and taxable treasuries was high at roughly 88%, but municipals displayed lower volatility. Our regression analysis showed that for every 100 basis points (1.00%) increase in the 10-year treasury yield, the mean increase in the 10-year municipal yield was 0.82%. Furthermore, municipal yields are less correlated relative to corporates which…
Jerome Powell and his Federal Reserve colleagues have begun taking steps to put the income back in fixed income assets, leading to one of the worst bond market drawdowns in the past forty years. Rates have spiked as the Fed has made a rapid about-face in its monetary policy approach, as it aims to quell inflation, potentially at the expense of slowing the economy. Concurrently, municipal yields are up substantially and offer attractive yields when compared to alternative high-grade fixed income assets. Should the new Fed policy induce a recession, current yield levels of municipals offer significant value in our view…
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Municipal Bonds: Local Impact
Investors flock to municipal bonds for yield and shelter - June 22, 2021
Bernardi Securities & Bernardi Asset Management move into a new headquarters location! - May 25, 2021