Jason Mertz

The municipal bond market is inefficient, fractured and constantly in flux, and active muni investors are much better equipped to navigate it than are passive ones—an advantage that we believe can improve outcomes. In fact, we found that—historically—an astonishing 98% of active muni strategies have meaningfully outperformed passive approaches over rolling three-year periods, and 87% have outperformed passive strategies over two-year periods.

Yield-Curve Positioning: Responding to Shifts and Shapes The shape and slope of the yield curve frequently change in response to economic growth expectations, inflation expectations, central-bank policies and more. Active managers may choose to own different combinations of maturities along the municipal yield curve to take advantage not only of relative yield levels but also of expectations for changes in the shape of the yield curve down the road.

Jason Mertz: Daryl, it feels like Groundhog Day, with yet another challenging quarter for muni investors. The index was down about 4%, bringing year-to-date returns to –1.4% for the year. So what happened in August and September? Daryl Clements: There’s a couple of things you could point to, the first being the constant drumbeat from the Fed of higher rates for longer. Also, the Fed recently removed two rate cuts next year. And then it's just the expectation of more Treasury issuance.