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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
|
3.13% |
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S&P National 0-5 Year Municipal Bond Index
|
0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| More |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
|
1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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High-Yield Fans Back In the Hunt |
THE BOND BUYER - May 23, 2011 - By Christine Albano
On the heels of a month-long rally in the municipal bond market, some yield-seeking institutional and retail investors are turning to riskier credits to get their fix.
“I think there has been an increasing comfort with munis in general and more investors are sliding down the credit curve a bit,” said Peter Hayes, managing director and head of the municipal bond group at BlackRock.
Municipals fell out of favor in a brutal sell-off that began in the fall of 2010 amid predictions of widespread defaults and bankruptcies in the public sector. Municipal bond mutual funds — including high-yield portfolios that invest in lower-rated and unrated bonds — suffered massive outflows.
Fast-forward five months.
Portfolio managers say now that outflows are subsiding, high-yield funds are again looking for paper and there is robust demand brewing for airline debt, tobacco bonds, health care credits, and corporate-backed municipal securities.
Some more aggressive mom-and-pop investors are mulling over the high-yield sector for the first time in nearly six months, according to experts.
For the week ended May 18, high-yield municipal funds that report their flows weekly saw total assets rise to $386.55 billion after seeing inflows of $94.8 million. That was the second week in a row that flows were positive after steady outflows dating back to November, according to Lipper FMI.
“That unto itself is a sign that the thaw is starting to take place,” said Timothy Pynchon, senior vice president and portfolio manager at Pioneer Investment Management in Boston.
“As we have come off Meredith Whitney’s comments in December, we have started to see a thaw, and that thaw has been working itself from triple-A, and has filtered down to double-A and single-A, and now we’re sort of at the triple-B level,” he said.
The inflows for high-yield funds come as investors continue to withdraw cash from the overall municipal bond fund complex.
Pynchon is very bullish on the high-yield sector and he sees the potential for “robust returns” for 2011 and 2012.
“You take the idea of the coupon being robust, and as a baseline that unto itself is what I think makes it a compelling story for investors to come back to our asset class,” he added.
Funds “are only now beginning to see positive flows and beginning to provide the normal magnitude of support for the high-yield sector,” said George Friedlander, senior municipal securities strategist at Citi. “Just the pure action of the flows, going from extremely large to quite small, has created a temporary pocket of demand” for new deals, he said.
Despite Whitney’s latest op-ed piece last week in the Wall Street Journal — about states struggling to submit balanced budgets by the end of the fiscal year and imminent defaults among municipalities — experts say the need for yield is convincing some investors to look past plain-vanilla general obligation debt for value.
Some new deals have seen coupons as high as 8% and they have been “well absorbed and well-priced,” Pynchon noted.
For the complete article.
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Income Security Recommendation January 2013 Issue.
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