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July 2021 Monthly Muni Market Summary

Municipal Market Performance (total return basis) – Source: CreditSights as of 7/31/2021

  • ICE BofAML Muni Index (U0A0): July returns of 0.75%, YTD returns of 2.12%

    • HY Muni Index (U0HY) outperforms for the 4th month in a row: July returns of 0.82%, YTD returns of 2.22%

  • Ice BofAML Taxable Muni Index (DQTM): July returns of 2.22%, YTD returns of 2.67%

Muni Spreads and Yields – Source: CreditSights, as of 7/31/2021

  • IG credit spreads ended July close to where they started

    • BBB Index ended tighter by 3bp – closing at the tightest spread since July 2007

    • Single-A Index is still 15bp wide of last year’s pre-pandemic low of +30, set last March

  • HY Index ended 3bp narrower on the month

    • Single-B Index tightened by 15bp to +145, still wide of last year’s pre-pandemic low of +114

    • CCC Index widened by 33bp

  • Changes in sector spreads were mixed in July

    • Sectors that tightened during the month: Lease, Industrial, PCR, GO and Insured Bonds

    • Sectors that widened during the month: Higher Education, Tobacco, Airport, Hospital, Toll Road, Multi- and Single-Family Housing

  • AAA benchmark yields ended lower but underperformed the move in US Treasury rates, causing Muni/Treasury yield ratios to decline slightly (making munis richer)

    • YTD the Muni Index leads both the UST and IG Corporate Bond Indices but lags the Corporate HY Index – though the Muni HY Index leads the Corporate equivalent

  • YTD price returns of several muni sectors are still negative, with the exception being the “risk-on” lower-quality tiers and the longer duration buckets

    • Among the IG sectors, Transportation and Airport Indices have the strongest YTD total returns

Muni Demand and Supply – Source: CreditSights, Bloomberg as of 7/31/2021

  • The total muni market shrank during July as issuers redeemed more bonds than they issued

    • July new issues volume was 27% less than June and down 24% YoY

    • July represented the first month since December 2020 with negative net supply

  • July saw the 3rd time this year that combined muni fund flows exceeded $10bn

    • Muni mutual funds added $8bn while muni ETFs added $2bn

      • At the current pace, muni ETFs could break the 1-year record for inflows during August

  • YTD total borrowing is 8% greater than last year’s pace

    • Tax-exempt issuance is up 14% while taxable issuance is now lagging 10% YoY

2021 Muni Outlook – Source: CreditSights, as of 7/31/2021

  • Net supply of bonds is likely to be negative again in August due to the share increase in redemptions before likely turning positive in September through November

    • October and November redemptions currently forecasted to be less than 2021’s monthly average

  • While the spread for the Airport Index widened at the end of July due to concerns over the Delta-variant, the potential for additional federal aid for airport from the still-discussed infrastructure bill should alleviate concerns


Anfield Capital Management, LLC is a registered investment adviser with the SEC. This report is for informational purposes only and does not constitute advice, an offer to sell, or a solicitation of an offer to buy any securities and may not be relied upon in connection with any offer or sale of securities. The contents of this report should not be relied upon in making investment decisions. The information and statistical data contained herein have been obtained from sources that we believe to be reliable but in no way are warranted by us as to accuracy or completeness. The accompanying performance statistics are based upon historical performance and are not indicative of future performance. The types of investments discussed do not represent all the securities purchased, sold, or recommended for clients. While many of the thoughts expressed in this report are stated in a factual manner, the discussion reflects only Anfield Capital’s beliefs about the financial markets in which it invests portfolio assets following the models. The descriptions herein, are in summary form, are incomplete and do not include all the information necessary to evaluate an investment in any model. Any prior investment results or returns are presented for illustrative purposes only and are not indicative of future returns. Investments with Anfield are subject to significant risks, which include, but are not limited to, the risk of loss of principal, lack of diversification, volatility, and market disruptions. Prospective investors are referred to our Form ADV 2A for a more detailed discussion of risk factors, which can be (a) found on the SEC's Investment Adviser Public Disclosure website at:, or (b) provided upon request. You should not construe the contents of this report as legal, tax, investment, or other advice. No representation, warranty or undertaking, express or implied, is given as to the accuracy or completeness of the information or opinions contained herein by Anfield Capital, its employees and no liability is accepted by such persons for the accuracy of completeness of any such information or opinions. Registration as an investment adviser does not imply a certain level of skill or training and no inference to the contrary should be made.

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