Municipal Bonds Present Rare Opportunity Amid Market Dislocation
The municipal bond market, traditionally a haven for tax-advantaged income and capital preservation, is flashing compelling signals after a period of underperformance. Year-to-date returns turned negative in mid-2025 even as Treasuries and corporates rallied—an anomaly that now offers high-net-worth investors a tactical entry point.
Third-quarter momentum suggests an inflection, with absolute yields hovering NEAR decade-high percentiles. The tax-equivalent yield calculus has grown particularly attractive for top earners in high-tax jurisdictions. This dislocation stems from technical outflows rather than deteriorating fundamentals, creating asymmetric upside potential.