November 08, 2019
During recessionary years of the past four decades, municipal bonds generated positive returns in all but two of them. One of those down years was 1981 – but in 1982, the second year of that inflation-fueled recession, municipals returned more than 40%. The other down year was 2008, when the Bloomberg Barclays Municipal Bond Index declined 2.47%. That same year, stocks in the S&P 500® Index fell 37%.*
Municipal bonds historically stay the course in up and down markets
Bloomberg Barclays Municipal Bond Index (1981 – September 2019)
Source: Barclays Live. Data as of Sept. 30, 2019.
What this means for investors:
Delivering an average annual return of 7.3% during the four-decade period illustrated above, municipal bonds have stayed the course across market cycles, and we believe they can add significant diversification potential within an overall portfolio over time.
*Source: Morningstar Direct.