FICC Focus A ‘Generational Opportunity’ in Munis: Masters of the Muniverse
Mar 21, 2025
Patrick Haskell, managing director and head of the Municipal Bond Group at BlackRock, delves into the evolving municipal bond market, highlighting it as a potential goldmine for income amidst changing tax policies. He discusses the implications of current dynamics, including the rise of active ETFs and the importance of using technology in assessing credit risks. Haskell emphasizes the unique opportunities for institutional investors while navigating the complexities of fiscal uncertainties and market trends in this transformative period.
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Generational Opportunity in Munis
- The municipal bond market is at a transformational time, with tax exemptions potentially endangered and credit risks rising.
- Despite these uncertainties, Pat Haskell sees a "generational opportunity to capture income" within the muni market.
Focus on Policy Interpretation
- BlackRock focuses on interpreting policy rather than predicting it, especially where they lack a clear advantage.
- They see the current market conditions as an opportunity to achieve yields not seen since before the 2008 financial crisis.
Navigating Muni Market Seasonality
- Be patient during the negative seasonality of March and April in the muni market due to elevated supply and reduced participation.
- View the back end of the muni curve as an opportunity, offering attractive excess returns compared to the taxable curve.