UBS On-Air: Market Moves Muni Panel - 2026 outlook discussion with UBS & Nuveen
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Dec 9, 2025 Doug Vissicchio, the Head of Municipal Sales at UBS, shares his insights alongside Daniel Close from Nuveen. They delve into the underperformance of 2025 in the muni market, exploring opportunities amid current challenges. A bullish outlook for 2026 is discussed, with predictions of $600B in supply and sustained inflows. They highlight the shift towards SMAs and ETFs, as well as the impact of technology on research. Vissicchio emphasizes improved liquidity and how upcoming Fed cuts might influence investor behavior in the market.
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Munis' Big Underperformance Is A Buying Window
- Municipal bonds were the weakest fixed-income sector in 2025 but now show a strong recovery since late August.
- Dan Close views this underperformance as a compelling buying opportunity with more room to run into 2026.
Positioning Tips For 2026 Munis
- Extend duration modestly and favor sectors like healthcare and higher education to capture expected muni outperformance.
- Seek 5% coupons, consider AMT over non-AMT, and tilt into higher coupon paper to pick up the relative value Dan Close describes.
NAV Inflows Can Fuel A Virtuous Rally
- Nuveen expects a virtuous cycle: NAV gains drive inflows which further lift NAVs and performance.
- They see sustained inflows as the key driver of muni performance into 2026 despite elevated supply.