U.S. Taxable Municipal Infrastructure Bonds: Compelling Opportunity for Global Fixed Income Investors

Executive Summary:

  • Negative rates among the developed world have helped bolster demand for positive yielding U.S. taxable municipal bonds, a smaller $622 billion segment of the $3.7 trillion municipal bond market.
  • Less robust liquidity and more limited credit diversification remain key challenges.
  • Growing U.S. infrastructure spending should lead to increased taxable municipal issuance, further expanding the investment opportunity and trading activity.
  • In Standish’s opinion, an investment allocation to U.S. infrastructure via U.S. taxable and tax-exempt municipal bonds would help to maximize yield, liquidity and diversification in high quality assets.

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