BondDesk announced Wednesday the launch of its first monthly municipal bond market report, which focuses on bond trading activity among retail investors.
The BondDesk Municipal Market Transparency Report, offered for free, is designed to provide financial advisors and sophisticated retail investors with visibility into trends in the muni market. BondDesk, based in Mill Valley, Calif., is a technology firm that operates a fixed income trading platform and provides wealth management solutions to financial advisors.
The
launch comes as increased muni market uncertainty has driven fund flows out of the market. Yet individual bonds can still offer good value to investors, said Chris Shayne (left), the chartered financial analyst and director at BondDesk who writes the monthly report, in a phone interview last Thursday with AdvisorOne.
"Retail investors have two choices: they can invest in mutual funds or they can invest in individual bonds, and historically, all the coverage has been about what's happening in the mutual fund market," Shayne said. "This report, for the first time that we know of, sheds light on what's going on with individual municipal bonds for retail investors."
Typically, big institutions buy bonds in lots of $100 million or more. In the case of retail investors, however, bonds are purchased in "odd lot" transactions of 100 bonds or fewer, equal to less than $100,000 par value. But while the retail muni market is much smaller than the institutional market on a par value basis, it accounts for 70% of trade volume, Shayne said.
"With municipals, we're all reading about the $17 billion mass exodus of investors from muni mutual funds during the month of November and December, but during that same time individual investors were aggressively buying individual municipal bonds because yields were going up," he said in the phone interview.
