Yield Yield Yield

Yields in the municipal bond market are at the highest levels in recent memory. The composite of our client’s accounts is reporting a Yield to Maturity of 3.75%, a Tax Equivalent Yield of 7.61%, and a Yield to Call of 2.95%. Remember the Tax Equivalent Yield is the return that a taxable bond would need to equal the yield on a comparable tax-exempt municipal bond in terms of structure.  Examples given of comparable taxable fixed income and bonds: according to www.wsj.com as of 4/20/23

· 0.49% Money Market, Annual Yield

· 2.76% Five-Year CD, Annual Yield

· 3.625% Five- Year US Treasury Note

· 4.67% 7-Day Yield SWVXX Schwab Value Advantage Money Fund

· 4.88% Five-Year High Quality Market (HQM) Corporate Bond Par Yield (St. Louis Federal Reserve)

Our primary goal is current income or maximizing yield without downgrading in quality or excessively extending maturities. We are not “total return” focused like our competitors in the mutual fund and ETF space. Every MuniBond we evaluate is scrutinized against the yield scale to determine the attractiveness of the yield considering purpose, credit rating, and structure. The yield to maturity, not price, of the MuniBond is the return the investor will realize if the bond is held to maturity.

If not now, when?

W. Jeffrey Watkinson



Senior Vice President

#WatkinsonMuniBonds #MuniBonds #municipalbonds 

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