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:
Table: Select general obligation and revenue bond indices, their yields, returns and durations:
More information on the characteristics of each index can be found on: www.spindices.com or by clicking on the index names below.
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