111.25 -0.04 (-0.04%)
After hours: 4:00PM EDT
|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||111.23 - 111.37|
|52 Week Range||106.30 - 111.66|
|PE Ratio (TTM)||N/A|
|Expense Ratio (net)||0.25%|
In 2016, Puerto Rico defaulted on constitutionally guaranteed GO (general obligation) bonds. On May 3, 2017, Puerto Rico filed for Title III bankruptcy.
The performance of municipal bonds has fallen since the 2016 election, as President Trump’s tax reform and infrastructure spending plans have caused some concern among investors.
There’s a terrific buying opportunity taking shape in the municipal-bond market. Almost no one sees it coming, and you can thank a familiar friend for it.
One possible driver to action could simply be alerting the public through their local media outlets just what havoc can be, and has been, wrought by cyberattacks.
We are all potentially at risk of cyberattack – directly or indirectly. When it comes to municipalities, this may not always be obvious to the average state or city taxpayer.
The municipal bond market actually rose last week, even as Hurricane Irma fears and the reality of Hurricane Harvey's path of destruction gripped the country. The iShares National Muni Bond ETF (MUB) rose 0.38% last week bringing its total return to 4.8% year-to-date. Much of that gain came because interest rates fell as investors rushed to safe haven government bonds.
Wall Street says you have to settle for the pathetic 2% yields most folks scrape by on from 10-year Treasuries, or your typical S&P 500 stock. Don’t believe them.
Devastating flooding in Houston, the country's fourth largest city, is bound to have an impact on the municipal bond market, but it hasn't shown up yet. Munis traded flat Monday with the iShares National Muni Bond ETF (MUB) up 1 cent in late afternoon trading to $111.32. Surprisingly, a newly issued block of Houston school bonds traded well, says Peter Block, credit strategist with Ramirez & Co. He says investors are well aware that federal and state funds will stabilize the economy.
Issues in default number just 29, down from 37 last year and 36 the year before, he reports Friday. Outside of Puerto Rico, trends look a lot better. Over the last twelve months, only three municipal sectors—retirement projects (+8 more), local GOs (+2), and local multifamily housing (+1)—are showing an increase in payment defaults versus their three year average (Fig. 10).
High-yield municipal bond income seems like a dream come true in today’s market. The ability to capture a 4%-plus income stream with little taxable impact in a strongly trending credit environment is the ideal situation for many retirees. Illinois recently received a downgrade in its credit rating status to one notch above “junk” level and Puerto Rico is still embattled over its gigantic debt restructuring deal as well.
Tobacco bonds have been volatile in the last seven years. Falling MSA payments caused the volatility. Tobacco bonds offer relatively good cash flow returns.
Todd Rosenbluth is director of ETF and mutual fund research at CFRA. When an elephant prepares to take steps in the jungle, the other animals should take notice. Such an analogy is appropriate with Vanguard and the ETF market.
Puerto Rico shares a story similar to Greece's (GREK) in terms of its dismal economic performance and exacerbated debt issues.