Munis getting slaughtered!

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watchnerd
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Re: Munis getting slaughtered!

Post by watchnerd » Mon Mar 23, 2020 8:47 pm

This is the most thrills, good and bad, I've seen around muni bonds in a decade.
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birdog
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Re: Munis getting slaughtered!

Post by birdog » Mon Mar 23, 2020 9:06 pm

Municipal bonds...the exciting new bad-boy on the block in the investing world!!! 8-)

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watchnerd
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Re: Munis getting slaughtered!

Post by watchnerd » Mon Mar 23, 2020 9:09 pm

Move over junk bond owners, here come munis to steal all your cheddar.
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Re: Munis getting slaughtered!

Post by CoastalWinds » Mon Mar 23, 2020 10:02 pm

I’d rather munis not have this dubious distinction. But I can’t say I’m surprised it happened. After all, I bought it, so it was destined. That and the VG energy fund.

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Re: Munis getting slaughtered!

Post by watchnerd » Mon Mar 23, 2020 10:06 pm

CoastalWinds wrote:
Mon Mar 23, 2020 10:02 pm
I’d rather munis not have this dubious distinction. But I can’t say I’m surprised it happened. After all, I bought it, so it was destined. That and the VG energy fund.
That's the spirit!
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CoastalWinds
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Re: Munis getting slaughtered!

Post by CoastalWinds » Mon Mar 23, 2020 10:09 pm

watchnerd wrote:
Mon Mar 23, 2020 10:06 pm
CoastalWinds wrote:
Mon Mar 23, 2020 10:02 pm
I’d rather munis not have this dubious distinction. But I can’t say I’m surprised it happened. After all, I bought it, so it was destined. That and the VG energy fund.
That's the spirit!
Heck yea, let it tank!

pascalwager
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Re: Munis getting slaughtered!

Post by pascalwager » Mon Mar 23, 2020 11:18 pm

sf_tech_saver wrote:
Mon Mar 23, 2020 11:37 am
VCLAX and VCADX are nearly 100% of my bond holdings. Its been a first-hand education to watch, but the bond ETFs have been hit much harder. I also had VTEB and thankfully had to sell that portion to pay my taxes last month.

I've certainly been reminded that munis are not great for crisis AA rebalancing--but I largely bought them for their tax-free cash flows which I can DCA back into the market every month. I'm more than willing to hold them forever and focus on these cash flows.

If even super long term high quality and broadly indexed muni-bond holders struggle we will have much bigger problems as a country.
As I recall, Bill Bernstein recommended no more than a 1/3 municipals allocation in his books and no more than a 50% allocation (of the 1/3) in a state fund. The remainder: 1/3 CDs, 1/3 Treasurys.

But check for yourself if you're interested.
Retired, pension, no SS | 55/45 | <1% cash | 20% rebalancing band

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watchnerd
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Re: Munis getting slaughtered!

Post by watchnerd » Mon Mar 23, 2020 11:29 pm

pascalwager wrote:
Mon Mar 23, 2020 11:18 pm
sf_tech_saver wrote:
Mon Mar 23, 2020 11:37 am
VCLAX and VCADX are nearly 100% of my bond holdings. Its been a first-hand education to watch, but the bond ETFs have been hit much harder. I also had VTEB and thankfully had to sell that portion to pay my taxes last month.

I've certainly been reminded that munis are not great for crisis AA rebalancing--but I largely bought them for their tax-free cash flows which I can DCA back into the market every month. I'm more than willing to hold them forever and focus on these cash flows.

If even super long term high quality and broadly indexed muni-bond holders struggle we will have much bigger problems as a country.
As I recall, Bill Bernstein recommended no more than a 1/3 municipals allocation in his books and no more than a 50% allocation (of the 1/3) in a state fund. The remainder: 1/3 CDs, 1/3 Treasurys.

But check for yourself if you're interested.
And I think Ferri was 25%?

The point being nobody advises putting a lot into munis.
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CFM300
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Re: Munis getting slaughtered!

Post by CFM300 » Mon Mar 23, 2020 11:53 pm

pascalwager wrote:
Mon Mar 23, 2020 11:18 pm
sf_tech_saver wrote:
Mon Mar 23, 2020 11:37 am
I've certainly been reminded that munis are not great for crisis AA rebalancing...
As I recall, Bill Bernstein recommended no more than a 1/3 municipals allocation...
Dr. Bernstein warned us.

viewtopic.php?f=10&t=175804#p2659058

viewtopic.php?f=10&t=175804#p2659664

annu
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Re: Munis getting slaughtered!

Post by annu » Tue Mar 24, 2020 12:11 am

I started our taxeable in January, after deciding we should invest in stocks, instead of real estate. Instead of listening to folks here and not doing bonds in taxeable, I am so glad, went in doing 55% muni bonds and 45% stocks.
Had both VWIUX and VWLTX( intermediate and long term muni), while stock is down 30% and more, muni is down 10% or less and went up by almost whole .7% today, while stocks went another 4% down.
So of it was not for munis, I would be trying to be overly excited about the TLH opportunities, which I think is something you accept you like, as reality of losing all that money is just harder to "like".
I still did tlh on stocks, but happy my "opportunity" to tlh, were limited to some extent... :sharebeer
Might sell muni at some point to rebalance, but beyond that happy I made the call, Money market would have been better, but if we are talking time machine, large amounts of tesla stocks would have been even better

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Re: Munis getting slaughtered!

Post by mrspock » Tue Mar 24, 2020 12:40 am

CoastalWinds wrote:
Mon Mar 23, 2020 10:02 pm
I’d rather munis not have this dubious distinction. But I can’t say I’m surprised it happened. After all, I bought it, so it was destined. That and the VG energy fund.
I bought VTEB on the very day it peaked. Why you ask? Because I was too cheap to pay the $50 MF fee Schwab charges to buy VWITX .... pretty sure this one is my fault. I think I've lost over $15k :shock: . I promise you.... this is the last time I "save" $50. You just have to laugh at stuff like this lol .

_james
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Re: Munis getting slaughtered!

Post by _james » Tue Mar 24, 2020 12:51 am

justsomeguy2018 wrote:
Thu Mar 19, 2020 4:45 pm
Not what I expected from the bond portion of my portfolio.
If you chart the NAV instead of the growth you can see what kind of fluctuations to expect. :)

Here is an example of MUB. I included VWAHX because it went back further. :beer

Image

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birdog
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Re: Munis getting slaughtered!

Post by birdog » Tue Mar 24, 2020 6:30 am

mrspock wrote:
Tue Mar 24, 2020 12:40 am
CoastalWinds wrote:
Mon Mar 23, 2020 10:02 pm
I’d rather munis not have this dubious distinction. But I can’t say I’m surprised it happened. After all, I bought it, so it was destined. That and the VG energy fund.
I bought VTEB on the very day it peaked. Why you ask? Because I was too cheap to pay the $50 MF fee Schwab charges to buy VWITX .... pretty sure this one is my fault. I think I've lost over $15k :shock: . I promise you.... this is the last time I "save" $50. You just have to laugh at stuff like this lol .
The NAVs between the ETF and the mutual fund just got askew due to high volatility and poor liquidity. The ETF price actually being more accurate according to a poster here who used to work in the mutual fund market. It will correct. I wouldn’t pay $50 to buy VWITX. I’d still pick VTEB.

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Re: Munis getting slaughtered!

Post by Hogan773 » Tue Mar 24, 2020 11:07 am

What would be good TLH partners for the VG High Yield Tax Exempt and the VG Intermediate Term Tax Exempt? Since these names have fallen a lot I could see some improvement in the next 30 days so whatever I buy into now for tax harvesting purposes could give me a gain in the new fund and then I might be stuck holding that for a while yes?

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Re: Munis getting slaughtered!

Post by CoastalWinds » Tue Mar 24, 2020 11:23 am

Munis making a comeback today!

am
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Re: Munis getting slaughtered!

Post by am » Tue Mar 24, 2020 11:25 am

CoastalWinds wrote:
Tue Mar 24, 2020 11:23 am
Munis making a comeback today!
Risk on today plus fed buying bonds including munis I think. Tomorrow we may lose that plus more.

CoastalWinds
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Re: Munis getting slaughtered!

Post by CoastalWinds » Tue Mar 24, 2020 11:31 am

am wrote:
Tue Mar 24, 2020 11:25 am
CoastalWinds wrote:
Tue Mar 24, 2020 11:23 am
Munis making a comeback today!
Risk on today plus fed buying bonds including munis I think. Tomorrow we may lose that plus more.
What happens tomorrow?

am
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Re: Munis getting slaughtered!

Post by am » Tue Mar 24, 2020 11:34 am

CoastalWinds wrote:
Tue Mar 24, 2020 11:31 am
am wrote:
Tue Mar 24, 2020 11:25 am
CoastalWinds wrote:
Tue Mar 24, 2020 11:23 am
Munis making a comeback today!
Risk on today plus fed buying bonds including munis I think. Tomorrow we may lose that plus more.
What happens tomorrow?
People will realize that the stimulus doesn’t reduce infections, deaths, entire industries from being shut down and we will go back to being on track for Great Depression 2.

sf_tech_saver
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Re: Munis getting slaughtered!

Post by sf_tech_saver » Tue Mar 24, 2020 11:35 am

watchnerd wrote:
Mon Mar 23, 2020 11:29 pm
pascalwager wrote:
Mon Mar 23, 2020 11:18 pm
sf_tech_saver wrote:
Mon Mar 23, 2020 11:37 am
VCLAX and VCADX are nearly 100% of my bond holdings. Its been a first-hand education to watch, but the bond ETFs have been hit much harder. I also had VTEB and thankfully had to sell that portion to pay my taxes last month.

I've certainly been reminded that munis are not great for crisis AA rebalancing--but I largely bought them for their tax-free cash flows which I can DCA back into the market every month. I'm more than willing to hold them forever and focus on these cash flows.

If even super long term high quality and broadly indexed muni-bond holders struggle we will have much bigger problems as a country.
As I recall, Bill Bernstein recommended no more than a 1/3 municipals allocation in his books and no more than a 50% allocation (of the 1/3) in a state fund. The remainder: 1/3 CDs, 1/3 Treasurys.

But check for yourself if you're interested.
And I think Ferri was 25%?

The point being nobody advises putting a lot into munis.
Totally fair points. I'm hoping they remain a sound bet cashflow wise even if the volatility/liquidity of them are not ideal right now. When investing a windfall after-tax in California there are only so many options. California is a huge and economically diverse state (similar scale to the French economy). They've been a lot more stable than the VTI portion of my after-tax portfolio :)
VTI is a modern marvel

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Re: Munis getting slaughtered!

Post by CoastalWinds » Tue Mar 24, 2020 11:41 am

am wrote:
Tue Mar 24, 2020 11:34 am
CoastalWinds wrote:
Tue Mar 24, 2020 11:31 am
am wrote:
Tue Mar 24, 2020 11:25 am
CoastalWinds wrote:
Tue Mar 24, 2020 11:23 am
Munis making a comeback today!
Risk on today plus fed buying bonds including munis I think. Tomorrow we may lose that plus more.
What happens tomorrow?
People will realize that the stimulus doesn’t reduce infections, deaths, entire industries from being shut down and we will go back to being on track for Great Depression 2.
I would hope that the market already knows this. I certainly do.

15202guy
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Re: Munis getting slaughtered!

Post by 15202guy » Tue Mar 24, 2020 11:41 am

Given its composition, I've been surprised that BMBIX (Baird Quality Intermediate Muni) has been hit so hard. It did provide some additional protection vs, say, VWIUX (Vanguard Intermediate-Term Tax-Exempt Adm), but not as much as I would have expected. Coupled with its lower yield, BMBIX has still under-performed VWIUX YTD.

15202guy
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Re: Munis getting slaughtered!

Post by 15202guy » Tue Mar 24, 2020 11:47 am

watchnerd wrote:
Mon Mar 23, 2020 11:29 pm
And I think Ferri was 25%?

The point being nobody advises putting a lot into munis.
Swedroe has argued that a high muni allocation is OK if you are buying high-quality munis. See viewtopic.php?t=175804

am
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Re: Munis getting slaughtered!

Post by am » Tue Mar 24, 2020 11:47 am

CoastalWinds wrote:
Tue Mar 24, 2020 11:41 am
am wrote:
Tue Mar 24, 2020 11:34 am
CoastalWinds wrote:
Tue Mar 24, 2020 11:31 am
am wrote:
Tue Mar 24, 2020 11:25 am
CoastalWinds wrote:
Tue Mar 24, 2020 11:23 am
Munis making a comeback today!
Risk on today plus fed buying bonds including munis I think. Tomorrow we may lose that plus more.
What happens tomorrow?
People will realize that the stimulus doesn’t reduce infections, deaths, entire industries from being shut down and we will go back to being on track for Great Depression 2.
I would hope that the market already knows this. I certainly do.
Markets seem to be in disarray, highly volatile and functioning poorly. Don’t know if they incorporate information like you think.

Also, how long will this stimulus keep industries and companies that are essentially shut down from closing? Seems like virus is just getting started in many parts including here in US.

JD13
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Re: Munis getting slaughtered!

Post by JD13 » Tue Mar 24, 2020 12:06 pm

I think VTEB is doing pretty good today. I'm working if I should eat my 3k loss in it and move it out to a safer allocation. It is currently 35% of my bond allocation.

workingatit
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Re: Munis getting slaughtered!

Post by workingatit » Tue Mar 24, 2020 12:11 pm

Why are yields low on muni, and perhaps other, bond funds (not talking mmf’s) after prices dropped?

cks
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Re: Munis getting slaughtered!

Post by cks » Tue Mar 24, 2020 12:39 pm

Perhaps because ETF NAV's have become uncoupled from underlying funds' NAV's:

https://www.morningstar.com/articles/97 ... lent-times

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Re: Munis getting slaughtered!

Post by birdog » Tue Mar 24, 2020 12:42 pm

JD13 wrote:
Tue Mar 24, 2020 12:06 pm
I think VTEB is doing pretty good today. I'm working if I should eat my 3k loss in it and move it out to a safer allocation. It is currently 35% of my bond allocation.
My bond portfolio right now consists of 48% VTEB (tax-exempt) and 52% BIV (inter-term bond). In light of recent events I'm thinking I'd like to get VTEB down to about a third and BIV up to about two-thirds. That will give me an overall composition of 33% muni, 36% treasury and 31% corporate. I'll do that by making future bond buys only to BIV. I don't have plans to sell any VTEB.

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birdog
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Re: Munis getting slaughtered!

Post by birdog » Tue Mar 24, 2020 12:46 pm

VTEB consists of:

AAA 22.6%
AA 54.4%
A 15.9%
BBB 6.4%
NR 0.7%

https://investor.vanguard.com/etf/profile/VTEB

That seems pretty high quality to me. Others opinions of the quality of VTEB?

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watchnerd
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Re: Munis getting slaughtered!

Post by watchnerd » Tue Mar 24, 2020 1:17 pm

sf_tech_saver wrote:
Tue Mar 24, 2020 11:35 am

Totally fair points. I'm hoping they remain a sound bet cashflow wise even if the volatility/liquidity of them are not ideal right now. When investing a windfall after-tax in California there are only so many options. California is a huge and economically diverse state (similar scale to the French economy). They've been a lot more stable than the VTI portion of my after-tax portfolio :)
Well, as someone who left SF only 3 years ago to move to Seattle....

I would want a bigger yield spread to take on that cash flow risk under current circumstances.

Revenue generating infrastructure that are bond-funded (like BART) are already reporting financial impact.

But we all have to pick our poison.
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JackoC
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Re: Munis getting slaughtered!

Post by JackoC » Tue Mar 24, 2020 1:20 pm

workingatit wrote:
Tue Mar 24, 2020 12:11 pm
Why are yields low on muni, and perhaps other, bond funds (not talking mmf’s) after prices dropped?
30 day SEC yields are backward looking. You can see from general references to muni bond yields that they (high grade) are near 3% now, miles above the published SEC yields for funds.
https://www.fmsbonds.com/market-yields/

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Re: Munis getting slaughtered!

Post by columbia » Tue Mar 24, 2020 1:51 pm

Larry Swedroe
@larryswedroe
5-year CD currently yields 1.85% vs. 5-year AA muni at 2.64%, a 4.46% tax-equivalent yield (assuming a 40.8% tax bracket). Given this dynamic, should consider buying tax-exempt munis in tax-advantaged accounts. Crises create unusual opportunities
If you leave your head in the sand for too long, you might get run over by a Jeep.

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Re: Munis getting slaughtered!

Post by JackoC » Tue Mar 24, 2020 1:54 pm

am wrote:
Tue Mar 24, 2020 11:47 am
CoastalWinds wrote:
Tue Mar 24, 2020 11:41 am
am wrote:
Tue Mar 24, 2020 11:34 am
CoastalWinds wrote:
Tue Mar 24, 2020 11:31 am
am wrote:
Tue Mar 24, 2020 11:25 am
Risk on today plus fed buying bonds including munis I think. Tomorrow we may lose that plus more.
What happens tomorrow?
People will realize that the stimulus doesn’t reduce infections, deaths, entire industries from being shut down and we will go back to being on track for Great Depression 2.
I would hope that the market already knows this. I certainly do.
Markets seem to be in disarray, highly volatile and functioning poorly. Don’t know if they incorporate information like you think.
Also, how long will this stimulus keep industries and companies that are essentially shut down from closing? Seems like virus is just getting started in many parts including here in US.
I believe you have to be able to exploit market inefficiency for it to matter. For particular sectors of the market and their relative value I'd expect there would now be some mispricings due to illiquidity...but retail investors are seldom in a position to exploit that. As to outguessing asset markets' direction on the whole, 'I know the market is now too optimistic about COVID', I'm pretty unconvinced the chances of success there, by looking at publicly available information and making a better analysis of it than the market, are any better now than in calmer times.

As it relates to this particular thread, muni's, though I think it's reasonable on a *risk* basis to do some reconsidering of muni's as part of one's 'safe' allocation. Even if that's not strictly 'staying the course' of exactly whatever it was you were doing before.

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Re: Munis getting slaughtered!

Post by watchnerd » Tue Mar 24, 2020 1:55 pm

columbia wrote:
Tue Mar 24, 2020 1:51 pm
Larry Swedroe
@larryswedroe
5-year CD currently yields 1.85% vs. 5-year AA muni at 2.64%, a 4.46% tax-equivalent yield (assuming a 40.8% tax bracket). Given this dynamic, should consider buying tax-exempt munis in tax-advantaged accounts. Crises create unusual opportunities
Or shoot for the moon and go for high yield corps at 7%

:twisted:
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GibsonL6s
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Re: Munis getting slaughtered!

Post by GibsonL6s » Tue Mar 24, 2020 1:56 pm

I bought a bit of a closed end fund holding CA Munis which was trading at a 25% discount, sure enough the discount narrowed and the fund is up. I plan to hang onto it for a long time for the yield.

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Re: Munis getting slaughtered!

Post by JAZZISCOOL » Tue Mar 24, 2020 2:03 pm

CFM300 wrote:
Mon Mar 23, 2020 11:53 pm
pascalwager wrote:
Mon Mar 23, 2020 11:18 pm
sf_tech_saver wrote:
Mon Mar 23, 2020 11:37 am
I've certainly been reminded that munis are not great for crisis AA rebalancing...
As I recall, Bill Bernstein recommended no more than a 1/3 municipals allocation...
Dr. Bernstein warned us.

viewtopic.php?f=10&t=175804#p2659058

viewtopic.php?f=10&t=175804#p2659664
Also, Allan Roth (I believe) recommends a max of 20% of your TOTAL bond allocation in muni bond funds.

sf_tech_saver
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Re: Munis getting slaughtered!

Post by sf_tech_saver » Tue Mar 24, 2020 2:37 pm

columbia wrote:
Tue Mar 24, 2020 1:51 pm
Larry Swedroe
@larryswedroe
5-year CD currently yields 1.85% vs. 5-year AA muni at 2.64%, a 4.46% tax-equivalent yield (assuming a 40.8% tax bracket). Given this dynamic, should consider buying tax-exempt munis in tax-advantaged accounts. Crises create unusual opportunities
Exactly. When you are in a 53% marginal tax rate bracket the after-tax yields from current distributions are very hard to match. When I bought VCLAX the after-tax distributions were over 3% --hard to turn down an almost 6% tax-adjusted return from a mostly AA rated set of bonds.
VTI is a modern marvel

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Re: Munis getting slaughtered!

Post by mrspock » Wed Mar 25, 2020 2:25 am

JD13 wrote:
Tue Mar 24, 2020 12:06 pm
I think VTEB is doing pretty good today. I'm working if I should eat my 3k loss in it and move it out to a safer allocation. It is currently 35% of my bond allocation.
I did some research on this tonight, some select quotes from the WSJ (sorry paywall):

About the Fed intervening in muni markets: https://www.wsj.com/articles/investors- ... 1584971123
Mortgage bonds and municipal bonds also rallied after getting direct attention from the Fed in Monday’s package. The yield of the benchmark Fannie Mae mortgage-backed bond due in September 2026 declined to about 1.186% on Monday from 1.217% Friday, according to data from Tradeweb. An Invesco Taxable Municipal Bond ETF finished up 7.91% on Monday, according to FactSet, implying the yields on the underlying bonds it holds were falling.
About the NAV spread formation: https://www.wsj.com/articles/bond-etfs- ... 1584964801
Each day, bank intermediaries and other middlemen buy baskets of instruments to exchange for shares of ETFs, or vice versa, to profit from price differences. Those trades keep ETF prices in check with their underlying investments and essentially prevent those funds from turning into closed-end funds.

It is more challenging doing that trade in choppy markets.
For those wanting the WSJ at this time, you can get print + digital for 12 weeks for $12 (Google: "wsj 12 for 12"). I think at times like this having access to high quality information is extremely valuable to explain what is happening out there.

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birdog
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Re: Munis getting slaughtered!

Post by birdog » Wed Mar 25, 2020 6:07 am

mrspock wrote:
Wed Mar 25, 2020 2:25 am
JD13 wrote:
Tue Mar 24, 2020 12:06 pm
I think VTEB is doing pretty good today. I'm working if I should eat my 3k loss in it and move it out to a safer allocation. It is currently 35% of my bond allocation.
I did some research on this tonight, some select quotes from the WSJ (sorry paywall):

About the Fed intervening in muni markets: https://www.wsj.com/articles/investors- ... 1584971123
Mortgage bonds and municipal bonds also rallied after getting direct attention from the Fed in Monday’s package. The yield of the benchmark Fannie Mae mortgage-backed bond due in September 2026 declined to about 1.186% on Monday from 1.217% Friday, according to data from Tradeweb. An Invesco Taxable Municipal Bond ETF finished up 7.91% on Monday, according to FactSet, implying the yields on the underlying bonds it holds were falling.
Thanks for sharing!

About the NAV spread formation: https://www.wsj.com/articles/bond-etfs- ... 1584964801
Each day, bank intermediaries and other middlemen buy baskets of instruments to exchange for shares of ETFs, or vice versa, to profit from price differences. Those trades keep ETF prices in check with their underlying investments and essentially prevent those funds from turning into closed-end funds.

It is more challenging doing that trade in choppy markets.
For those wanting the WSJ at this time, you can get print + digital for 12 weeks for $12 (Google: "wsj 12 for 12"). I think at times like this having access to high quality information is extremely valuable to explain what is happening out there.
Thanks for sharing! Good info.

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colodane
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Re: Munis getting slaughtered!

Post by colodane » Wed Mar 25, 2020 3:56 pm

I own Vanguard Limited Term, Intermediate Term and High Yield national muni funds. Needless to say, all of these have taken some losses recently.

Haven't taken any action yet, but TLH for some lots of these holdings is probably in my future. I'm considering VTEAX as a temporary (or semi-permanent ?) partner. This might also be an option for others on this thread who are asking about alternatives.

mhalley
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Re: Munis getting slaughtered!

Post by mhalley » Wed Mar 25, 2020 4:05 pm

I TLH my int term muni fund. I guess it’s good, as it was a legacy position from before I retired and my tax bracket doesn’t support owning it any more.

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justsomeguy2018
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Re: Munis getting slaughtered!

Post by justsomeguy2018 » Wed Mar 25, 2020 8:45 pm

:?
mhalley wrote:
Wed Mar 25, 2020 4:05 pm
I TLH my int term muni fund. I guess it’s good, as it was a legacy position from before I retired and my tax bracket doesn’t support owning it any more.
Smart move.

I sold off all my MUB today after it was no longer in the red.

With the proceeds I bought a mixture of total market (if I'm gonna take risk prefer the rewards that equities can provide vs munis), inflation protected bonds, int. treasuries, and a small slice of total bond.

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birdog
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Re: Munis getting slaughtered!

Post by birdog » Wed Mar 25, 2020 9:00 pm

I just can’t sell out enough to purge munis to buy treasuries right now. I’m not a fan of sell low to buy high for a yield that sucks and a NAV that will most likely drop. No thank you. I certainly won’t make corrections in the midst of market turmoil. The rumor of the death of munis has been greatly exaggerated in my opinion. I love to hear the doom and gloom on here, tho. It makes me more optimistic. I’ve seen this movie before and it always ends the same way. If it ends different this time then holdings don’t matter so much anyway. :beer

CoastalWinds
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Re: Munis getting slaughtered!

Post by CoastalWinds » Wed Mar 25, 2020 9:43 pm

birdog wrote:
Wed Mar 25, 2020 9:00 pm
I just can’t sell out enough to purge munis to buy treasuries right now. I’m not a fan of sell low to buy high for a yield that sucks and a NAV that will most likely drop. No thank you. I certainly won’t make corrections in the midst of market turmoil. The rumor of the death of munis has been greatly exaggerated in my opinion. I love to hear the doom and gloom on here, tho. It makes me more optimistic. I’ve seen this movie before and it always ends the same way. If it ends different this time then holdings don’t matter so much anyway. :beer
Exactly. I’m in the same position and was thinking the same.

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justsomeguy2018
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Re: Munis getting slaughtered!

Post by justsomeguy2018 » Wed Mar 25, 2020 9:54 pm

birdog wrote:
Wed Mar 25, 2020 9:00 pm
I just can’t sell out enough to purge munis to buy treasuries right now. I’m not a fan of sell low to buy high for a yield that sucks and a NAV that will most likely drop. No thank you. I certainly won’t make corrections in the midst of market turmoil. The rumor of the death of munis has been greatly exaggerated in my opinion. I love to hear the doom and gloom on here, tho. It makes me more optimistic. I’ve seen this movie before and it always ends the same way. If it ends different this time then holdings don’t matter so much anyway. :beer
You're probably right, I also decided my tax rate probably isn't high enough for munis and that i mostly want bonds as a safety valve to equity disruptions rather than the yield. If the market tanks further I will probably sell the treasuries and use proceeds to buy stock.

UpperNwGuy
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Re: Munis getting slaughtered!

Post by UpperNwGuy » Wed Mar 25, 2020 10:31 pm

CoastalWinds wrote:
Wed Mar 25, 2020 9:43 pm
birdog wrote:
Wed Mar 25, 2020 9:00 pm
I just can’t sell out enough to purge munis to buy treasuries right now. I’m not a fan of sell low to buy high for a yield that sucks and a NAV that will most likely drop. No thank you. I certainly won’t make corrections in the midst of market turmoil. The rumor of the death of munis has been greatly exaggerated in my opinion. I love to hear the doom and gloom on here, tho. It makes me more optimistic. I’ve seen this movie before and it always ends the same way. If it ends different this time then holdings don’t matter so much anyway. :beer
Exactly. I’m in the same position and was thinking the same.
Me too.

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whodidntante
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Re: Munis getting slaughtered!

Post by whodidntante » Wed Mar 25, 2020 10:35 pm

watchnerd wrote:
Mon Mar 23, 2020 8:47 pm
This is the most thrills, good and bad, I've seen around muni bonds in a decade.
All of the risk with none of the return. :twisted:

Momus
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Re: Munis getting slaughtered!

Post by Momus » Wed Mar 25, 2020 10:37 pm

I sold all my CA munis and convert all to stock. It got slaughtered more :D

Thesaints
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Re: Munis getting slaughtered!

Post by Thesaints » Thu Mar 26, 2020 2:12 am

I have about 70k of vanguard ultra short term bonds fund. I have accumulated a little less than $500 of capital losses.
Thinking of exchanging to Vanguard muni money market, currently yielding 3.77%.
A few bucks of extra interest for a bit and then, once yield renormalize, I can exchange back.
With the ultra short term bind fund yielding 2% fully taxable, I don't think there is a way to lose money.

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birdog
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Re: Munis getting slaughtered!

Post by birdog » Thu Mar 26, 2020 3:01 am

whodidntante wrote:
Wed Mar 25, 2020 10:35 pm
All of the risk with none of the return. :twisted:
Depends on your tax situation.

reisender
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Re: Munis getting slaughtered!

Post by reisender » Thu Mar 26, 2020 5:48 am

I used to think bogleheads was a conservative group but this thread seems a bit hyperbolic. First of all, slaughtered? Secondly why do I keep reading on bogleheads to own total bond market over munis unless you are in the highest tax brackets? Have you guys actually compared distributions? In normal times it is probably true that taxable bonds yield more for those in the low to middle brackets but we have not been living in normal times, at least since about 2008. From what I have seen, using vanguard funds, the tax exempt municipal bond fund has higher credit quality and pays within tenths of a percent of the same distribution yield as total bond. And when it comes time to file my taxes I don't hand over 15-20% of that to the federal gov, so there's no way I am not money ahead of the total bond fund. Right now with corporations looking to uncle sam for life support I would not feel comfortable holding their debt on top of their common stock.

The recent drop and now rebound in VWIUX has been interesting to watch, I think they will be fine. I don't equate a less than 10% drop from the peak to being slaughtered.

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