Summary:

The BondView Buy / Sell index tracks about 1.2 million bond transactions from the prior 30 days and helps investors spot value and risk in the complex municipal bond marketplace. The Buy Sell index shows a historically higher demand than supply for muni bonds despite the news about potential muni bond market woes.

Commentary:

Over the last few years, the makeup of the typical muni bond buyer has changed from what was once an institutionally dominated marketplace to being retail driven. The average retail investor has tended to buy and hold till maturity and been less focused on daily price fluctuations. Retail investors own nearly 70% of all muni bonds (directly and thru funds) and account for 81% of trading volume, according to the SEC.

Low interest rates on cash and higher income tax rates have have contributed to the increasing number of retail buy and hold investors that are major demand driver for muni bonds. In addition, there has been strong demand for build america muni bonds which are bought into tax deferred accounts and international investors.