Recent Commentary
MMA Muni Outlook January 2011
Market Summary
Losses Continued, Creating Value for Investors
The municipal market posted losses for another month. The MMA municipal price index fell -2.3%. However, through Janu-ary 18, the market’s price decline was -3.6%, so that in the last 9 sessions of the month, 36% of the month’s losses were re-claimed. Investors began to take notice of the 8% taxable equivalent yield available in 30-years as AAA tax-exempt yield rose above 5%. In addition, the MMA index edged into positive territory. Unfortunately, since Labor Day 2010, the municipal market hasbeen unable to sustain a positive price trend. The downward price pressure has correctly been attributed to the sizeable redemptions from the mutual bond funds over the past 3 1/2 months, in excess of $25B.
MMA Muni Outlook January 2011
