The war in Iran has increased volatility across fixed income markets, pushing municipal bond yields higher as investors reassess inflation risk, energy costs and the path of Federal Reserve policy. Even so, historically elevated municipal bond yields present a compelling opportunity for tax-sensitive investors.
The war in Iran has added pressure to fixed income markets, particularly in U.S. Treasuries. The 10-year Treasury yield recently traded near 4.7% as investors repriced inflation risk and the economic effects of higher energy costs and what that may mean for monetary policy. At the same time, municipal bond yields have risen as well, with 10-year tax-free bond yields reaching roughly 3.8% or 6.3% on a tax-equivalent basis. This is key because entry-point yield is often a strong indicator of long-term return potential.
While yield volatility is likely to persist, our Tax-Managed Fixed Income solution seeks to uncover value in the municipal bond market through disciplined security selection, active risk management and tax-aware portfolio management.
