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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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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)
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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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How to play it: Harrisburg not a meltdown for munis |
REUTERS - Oct. 13, 2011 - By Sam Forgione
THE ISSUE: Harrisburg, Pennsylvania filed for Chapter 9 bankruptcy on Wednesday, leading to questions about how other municipal bonds might be affected.
By Sam Forgione
(Reuters) - Municipalities across the country face budget woes, but few are expected to follow in the Pennsylvania capital city's footsteps.
True, municipal bond downgrades are on the rise this year. But defaults remain rare and represent a small share of the $3.7 trillion municipal bond market. Just $1.1 billion dollars in outstanding debt have defaulted this year, according to Lipper Research Services.
In a market environment where yield is hard to find, intermediate-grade muni funds have had a total return of 5.33 percent this year, without figuring in any tax advantage, according to Lipper. Top-rated munis total returns, meanwhile, have been just over 4 percent.
Concern over the fiscal health of U.S. states and cities has boosted yields over levels of past years. But the overwhelming majority continue to pay down their bonds -- and strategists see muni opportunities for judicious investors.
STEADY MUNI ETFS
Funds offer safety by not putting too much cash in any one place. Moreover, A-rated muni ETFs will completely avoid riskier bonds issued by Harrisburg.
"It would not have qualified for these ETFs," said Tom Lydon of etftrends.com. The city's $69 million in water refunding bonds are rated Ba1, several steps down from an A rating, and were put on review for possible downgrade earlier this month.
Lydon list four ETFs in his safe category: iShares S&P National Muni Bond Fund, SPDR Barclays Capital Short-Term Muni Bond ETF, SPDR Barclays Capital Muni Bond ETF, and PowerShares Insured National Muni Bond Portfolio.
Dave Fry of fund analysis Web site ETFDIGEST.COM said it's best to play safe. He says"long-maturity, high-yield ETF" would be a solid option.
The key with all of the funds is that they can spread out the risk posed by a single city's failure to pay. But investors should look at the fund prospectus before leaping.
"Any more than 50 percent of a portfolio in a single state shows a lack of diversification," said Alan Schankel, a bond market analyst at Janney Montgomery Scott.
MUNI FUNDS
Hugh McGuirk, who heads the municipal bond team at T. Rowe Price said municipal bond fund investors won't see any impact from the Harrisburg bankruptcy because the city is a small issuer of debt - its bankruptcy filing stemmed from $300 million debt from a failed incinerator project.
Indeed, some strategists say the current slump in muni prices might be coming to an end soon. That means those unusually fat yields could slim down and bargains will be harder to find.
"Premiums for munis are at historically cheap levels," said Jerry Paul, chief investment officer of Essential Investment Partners.
For the complete article.
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