Summary
- It has been hard to feel confident in this space in the last couple of months due to both liquidity concerns at the outset and credit concerns more recently.
- The combination of these two risks pushed the ratio of AAA muni yields to Treasuries to highs rarely seen. Typically near 85%, the ratio hit over 200%.
- We have seen rapidly-rising muni cef NAVs. During these periods, waiting for the discount-based timing flag to flip from HOLD to BUY can result in a higher buy price.
- We have updated the buy under and sell over thresholds based on the new NAV yields and all the distribution changes since June 1.
Seeking Alpha
Alpha Gen Capital
Jul. 7, 2020