BlackRock Says ‘Spoiled’ Muni Buyers to See Smaller Gains
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Investors in the $3.7 trillion municipal market should expect lower returns in 2013 than the prior two years, when local yields rallied to a 47-year low, said Peter Hayes, BlackRock Inc.’s head of muni debt.
State and local debt yields have dropped as investors sought a haven from Europe’s debt crisis and potential federal tax increases. The market earned about 18 percent in the previous two years combined, the most since the 2000-2001 period, according to Bank of America Merrill Lynch index data. From 1989 to 2010, the average annual return was 6.7 percent.