Coronavirus driven market continue to skew risk-off/risk-on asset class results.
Yields on investment grade munis softened (rose) as concerns about the impact of COVID-19 on municipal issuers has risen.
The 10-year IHS Markit AAA Muni Yield at month-end was 1.38% a marked shift cheaper than month-end February.
Compared to the 2.21% dividend yield of the SPDR S&P 500 ETF, the IHS Markit Municipal Bond 10 Year AAA yield of 1.38% continues to be very rich from an income generation perspective relative to the equity market dividend yield. However, this assumes dividends will flow in the same amount as pre-Covid-19 markets.
Select Asset Class Total Returns & Yields Year-to-Date
Sources: iShares by BlackRock, SPDRs and Yahoo.com. Table is provided for illustrative purposes only. Past performance is not a guarantee of future results. TEY = Taxable Equivalent Yield calculated at assumed tax rate indicated. Data as 3/31/2020. (1) SPDR S&P 500 ETF Yield is Dividend Yield as of 3/30/2020.
Sources: IHS Markit (Municipal bond yields), SPDR and the U.S. Department of Treasury. Chart is provided for illustrative purposes only. Past performance is not a guarantee of future results. Data as 3/31/2020 with exception of SPY Dividend yield which is as of 3/30/2020.
2019 tax brackets, however not all tax brackets are represented herein
End of day yields are used
At the time of this writing, JR Rieger’s fixed income related holdings include investment grade individual municipal bonds, insured municipal bonds, a municipal bond money market fund and a position in the VanEck Vectors High-Yield Municipal Index ETF (HYD)
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