Municipal Fixed Income Investment Strategy — September 2023

September 14, 2023 — Municipal Fixed Income Investment Strategy provides an overview of Sage’s market outlook and sector positioning.

Market Outlook

• Despite revenue receipts continuing to slow, municipal issuers remain strong and well positioned in the event of an economic slowdown. Rate volatility and uncertainty are the biggest challenges for fixed income investors, as the market remains focused on economic data and Fed policy.
• “Higher for longer” continues to be the overarching theme; however, rates seem to be closer to the top of the range. From a positioning standpoint, Sage is modestly long duration with a bias toward longer dated structures as the yield curve is inverted out to 10 years and positively sloped in the back end. Although valuations have recently compressed, Sage is still leaning into selective single A and BBB credits.