January 2018 Municipal Market Returns

For the month of January, the S&P Municipal Bond Index had a -0.95% total return. The rise in rates across the yield curve was nearly a mirror image of the fall in rates during the previous month.  Prerefunded/ETMs led the sector returns, while Hospitals and Tollroads dropped from outperforming the Index in December to underperforming in January.

Selected S&P Indices:

Tot Return bps/dur
Municipal Bond Index
Intermediate Index
Investment Grade Index
High Yield Index

-0.95%
-0.98%
-1.01%
0.03%

-15
-17
-16
0

S&P Municipal Bond Index Components:

Years to Maturity Tot Return bps/dur
0.000-4.999
5.000-9.999
10.000-14.999
15.000-29.999
30.000+

0.16
-1.03%
-1.52%
-1.49%
-1.56%

7
-19
-21
-16
-12

 
Ratings Tot Return bps/dur
Aaa / AAA
Aa / AA
A / A
Baa / BBB
Ba / BB
B / B

-1.04%
-1.02%
-1.05%
-0.76%
-0.48%
0.48%

-17
-16
-16
-11
-7
10

 
Outperforming Sectors Tot Return bps/dur
Tobacco Settlement
Prerefunded/ETM

0.21%
0.17%

1
2

Underperforming Sectors Tot Return bps/dur
Tollroad
Hospital

-1.33%
-1.42%

-16
-18

The tables above show returns for several indices and for various components of the S&P Municipal Bond Index. To make returns in the tables comparable, each total return is divided by the relevant beginning-of-month effective duration, resulting in basis points per unit of duration (bps/dur).

Change during January 2018 for the Standard & Poor’s AAA Rated Non-Callable Municipal Yield Curve:

 Dan Garrett, CFA

Dan Garrett, CFA