From Bloomberg.com
Pimco Joining Sellers Spurs Steepest Monthly Losses: Muni Credit
By Michelle Kaske - Jun 13, 2013 8:01 PM ET
The $3.7 trillion municipal market is poised for its first two-month slide since 2011 as Bill Gross, manager of the world’s biggest bond fund, is joining individual investors in reducing holdings of local debt.
Tax-free securities have lost 1.5 percent this month after a 1.3 percent drop in May, and are underperforming Treasuries by the most since December, Bank of America Merrill Lynch data show. Amid speculation that the Federal Reserve will scale back its bond buying, benchmark 10-year muni yields are the highest since March 2012.
Individuals, who own about 70 percent of munis directly or through funds, have led the exodus, pulling out the most money this year. Gross, co-founder of Pacific Investment Management Co., cut his local-debt allocation by one percentage point to 4 percent in May, the lowest since July, in the $285 billion Total Return Fund. The Newport Beach, California-based company released the data on its website
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