economy
BlackRock is finding solid tax-free yields in this corner of the bond market
The municipal bond market has attractive opportunities, and it pays to be particular.
TL;DR
- Municipal bond issuance is projected to surpass $580 billion this year, with strong new cash inflows.
- Tax-free income from municipal bonds is more valuable to individuals in higher tax brackets.
- BlackRock's strategy includes being neutral on duration but liking the long-end of the muni bond curve (20-22 years).
- The firm favors higher quality bonds with coupons above 5% to navigate market uncertainty.
- Preferred sectors include revenue bonds in housing and transportation, and select corporate-backed municipal bonds.