Municipal Bonds – Consistent Performers in a Low-Interest Environment

Aegis Capital Corp pic

Aegis Capital Corp

Established in 1984, Aegis Capital Corp. is a respected provider of client-driven services that meet the needs of individual and institutional investors. In the retail sphere, Aegis Capital Corp. provides solutions that incorporate government securities and municipal bonds as part of a diversified allocation approach.

Despite widely reported issues in Puerto Rico and Detroit, municipal bonds have performed with consistent strength in recent years. Bolstered by record-low interest rates, they have provided investors with a tax-advantaged route toward growing wealth while mitigating risk. In addition to outperforming Treasury and corporate issues in the bond market, they were neck and neck with the major equity indexes through late 2015.

The risk posed by high-profile defaults, such as that which occurred in Puerto Rico, are mitigated in large part by risk assessments that already discount valuations in the muni bond market. While credit risk is an issue, perception that contagion could occur is of larger fundamental concern. A majority of investment advisors expect municipal bonds to continue to outperform many other investment areas. They should continue to be a vital part of a properly balanced allocation strategy so long as interest rates remain near historic lows.


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