Schroders Sees Value in Municipal Bonds Over Treasuries

The video discusses the attractiveness of municipal bonds (munis) relative to treasuries, emphasizing a broader perspective on fixed income investments. It highlights the importance of considering duration and credit risk, with a focus on the front end of the curve for better value. The discussion also covers liquidity management strategies and the correlation between munis and industrials, noting that economic activity impacts muni valuations with a delay.

What is the main reason munis are considered moderately attractive compared to treasuries?

• Higher absolute yields

• Higher credit risk

• Lower liquidity

• Broader fixed income perspective

What is the current target duration range for investments discussed in the video?

• 3 to 4 years

• 2 to 3 years

• 4 to 5 years

• 1 to 2 years

Which type of securities is considered the second tier of liquidity within the fixed income universe?

• Corporate bonds

• T-bills

• Municipal bonds

• Mortgage-backed securities

Why do munis typically lag behind industrials in reflecting economic activity?

• Higher volatility

• Higher interest rates

• Delayed fundamental data

• Lower credit ratings

What is the primary factor driving muni valuations for the foreseeable future?

• Inflation

• Credit risk

• Economic growth

• Moving rates