Municipal Bond ETF Model Portfolio Rebalance for Q1 2019
Sources: VanEck Vector Funds ,iShares by BlackRock, andThe Vanguard Group. Table is provided for illustrative purposes only. Past performance is not a guarantee of future results. TEY = Taxable Equivalent Yield calculated at an assumed 37% tax rate. Data as of 1 is 12/24/2018, 2 is 12/26/2018, 3 is 11/30/2018.
Rebalancing objective: Generate incremental yield over market “beta” while maintaining duration risk exposure
Keep overall duration at or about 5.5 years while generating above market yields
Despite low projected 2019 new issuance keep an eye out for underlying rates steepening
Munis remain “risk off” asset class as potential risk aversion asset class during periods of equity volatility
Take advantage of incremental yields of short term high yield municipal bonds
Stay as liquid as possible using larger ETFs and that have options available on the ETF where possible
Stay efficient by keeping management fees as low as possible
Taxable Equivalent Yield calculation is not perfect: for example, the municipal high yield sector has exposure to bonds subject to AMT and that is not included in the calculation.
2018 tax brackets, however not all tax brackets are represented herein
End of day yields are used
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JR Rieger and or the Rieger Report LLC has not received compensation either directly or indirectly from the sponsor(s) of the ETF(s) included in this report.
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Rebalance for Q1 2019
