Municipal Fixed Income Investment Strategy January 2024
January 12, 2024 — Sage answers the 4 big questions (outlook for macroeconomic growth, Fed policy, valuations, and investor sentiment) and illustrates our municipal fixed income positioning in the current environment.
- Yield levels, although off their recent highs, still represent an attractive entry point, especially if the economy continues to slow and Fed policy becomes more dovish. The municipal market provides a well-supported backdrop as credit quality remains stable and tax-exempt yield carry remains attractive.
- The coming shift to lower rates will drive price returns positive and benefit longer duration strategies the most. Credit challenges will inevitably develop; however, the initial phase of the slowdown will be relegated to the higher-beta/lower-rated municipal sectors.
- Sage’s barbell allocation will benefit when the inverted 2s5s curve experiences a bull-steepening. We remain committed to our strategic overweight to single A credits, and as we progress through 2024, we will gradually shift some of our higher-beta/lower-credit quality sectors and credits into lower-beta/higher credit quality as economic challenges become more pronounced. Finally, Sage will continue to tactically leverage volatility events, as they represent some of the most attractive entry points.
Municipal Fixed Income
Municipal Fixed Income Perspectives — January 2024
January 11, 2024 -- This presentation provides an overview of our market outlook and key themes, and it illustrates how Sage is positioned in the current environment.
The Market Environment for Short-Term Investors
January 11, 2024 -- A significant amount of assets -- $6 trillion -- are currently parked in money market funds. With the Fed expected to cut rates in 2024 . . .
Goldilocks and the Five Rate Cuts
January 8, 2024 -- The mix of factors that drove macro markets last year are largely the same to start this year. The main difference is that markets are now priced for perfecti