Municipal Bond ETF Model Portfolio Rebalance for Q2 2019
Click the above image to enlarge.
Sources: VanEck Vector Funds,iShares by BlackRock, and The 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 3/15/2019 unless noted: 13/14/2019, 22/28/2019.
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
Reducing exposure in overpriced short term investment grade muni market and taking gains in the richly priced national muni market. Result will be to take advantage of munis appearing rich v. other asset classes and allocate more toward high yield muni bonds on the shorter end the curve by increasing from 20% to a 30% allocation in 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
Past performance of any investment product or index referenced in the Rieger Report is not an indication of or guarantee of future results.
The Rieger Report LLC is not an investment advisor, and the Rieger Report LLC makes no representation regarding the advisability of investing in any such investment fund or other investment vehicle. A decision to invest in any such investment fund or other investment vehicle should not be made in reliance on any statements set forth in this document. Prospective investors are advised to make an investment in any such fund or other vehicle only after carefully considering the risks associated with investing in such funds, as detailed in an offering memorandum or similar document that is prepared by or on behalf of the issuer of the investment fund or other investment product or vehicle. A financial advisor should be contacted to determine what may be best for your individual needs. The Rieger Report LLC is not a financial or tax advisor. A tax advisor should be consulted to evaluate the impact of any tax-exempt securities on portfolios and the tax consequences of making any particular investment decision. No legal relationship is created between you and Rieger Report LLC.
The Rieger Report LLC does not act as a fiduciary or investment advisor. While the Rieger Report LLC has obtained information from sources it believes to be reliable, the Rieger Report LLC does not perform any audit or undertake verification of any information it receives.
The Rieger Report Rankings and model portfolios are opinions of relative ranking among the peer group analyzed as of the date expressed and not statements of facts. Rieger Report model portfolios are intended for illustration only. Any opinion or analysis decisions are not to be construed as recommendations to purchase, hold or sell any securities or to make any investment decisions, and do not address the suitability of any security. The Rieger Report LLC does not assume any obligation to update the content in this publication in any form or format.
Your use of any information from this document or presentation is at your own risk and without recourse against Rieger Report LLC, its members, managers, or employees. To the maximum extent permitted by law, Rieger Report LLC disclaims any and all liability in the event any information, commentary, analysis, and/or opinions prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.Municipal Bond ETF Model Portfolio
Rebalance for Q1 2019
Click the above image to enlarge.