Barron’s features Baird’s take on Muni Credit Cycles

Baird’s take on managing through a municipal credit cycle was featured in a November 7 blog post by Barron’s reporter Amey Stone titled “Municipal Cycle Argues for Taking Less Credit Risk Now.” Following is an excerpt:

Duane McAllister, municipal bond portfolio manager at Baird, writes in a recent article that, given where we are in the third municipal credit cycle in the past 20 years, it makes sense for investors to scale back on credit risk.

This cycle started in 2009 with very wide credit spreads, but spreads have been contracting and don’t have much further to narrow, McAllister argues. Basically, he argues that more can go wrong for munis than can go right, given where valuations are.

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