Rieger Report: State G.O. municipal bonds have underperformed

Overall, general obligation bonds have underperformed revenue bonds over the last five years  of low rates.   State general obligation bonds have been the sector that is holding back returns as the lower yield and shorter duration characteristics of these bonds have resulted in muted returns in the up market.

While revenue bonds have a larger foot print by par amount outstanding in the municipal bond market, general obligation bonds remain an integral component of the financing of infrastructure.

Chart: Par amount, stated in billions, of municipal bonds tracked in each index:

Source: S&P Dow Jones Indices, LLC. Data as of April 7, 2017. Chart is provided for illustrative purposes. It is not possible to invest directly in an index. Past performance is no guarantee of future results.

Table: Select general obligation and revenue bond indices, their yields, returns and durations:

*Yield represented is Yield to Worst (YTW). Source: S&P Dow Jones Indices, LLC. Data as of April 7, 2017. Table is provided for illustrative purposes. It is not possible to invest directly in an index. Past performance is no guarantee of future results.

More information on the characteristics of each index can be found on:  www.spindices.com or by clicking on the index names below.

S&P Municipal Bond State General Obligation Index

S&P Municipal Bond Local General Obligation Index

S&P Municipal Bond Revenue Index

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