It's a Great Time for Muni Bonds

It's a Great Time for Muni Bonds

We have long written about the two periods when the municipal bond market organically generates the most cash flow into the market — the January / February period and the June / July period. These are the periods when most municipal bonds pay interest and mature. Also, the municipal market tends to screech to a halt between Thanksgiving and New Year's, as well as during the summer vacation periods of July and August. 

Copy of questions answered (5)

So, the next question should be: When is the most opportune time to buy municipal bonds? Answer: In the second and fourth quarters of the year (more specifically, May and June, followed by the weeks around the month of October in the fall). 

Let’s look at some data to test this thesis.

Supply Side (New issuance of Municipal Bonds)

The following table shows the average monthly issuance of municipal bonds for various periods (and their rankings):

Screen Shot 2023-09-18 at 2.29.49 PM

As you can see, October ranks as first (3 times) or second (one time) in terms of monthly issuance of municipal bonds over 20 years, 10 years, five years, and three years (the months of January and February rank at the bottom of the rankings for the same periods).

Demand Side (Cash flow of combined municipal bond mutual funds and ETF’s)

The following table shows the combined cash flows into municipal bond mutual funds and ETF’s from 2019 - July 2023 (with their rankings):

Screen Shot 2023-09-18 at 2.30.14 PM

January and February rank at the top of the distribution regarding positive (or least negative) cash flows. September and October rank near the bottom in the distribution.


Generally, the period between Labor Day and Thanksgiving generates very high levels of new issue supply of municipal bonds and the lowest levels of investor demand. High supply and low demand is a formula for opportunity for the discerning investor.

If you’re interested in leveraging that opportunity yourself (or for your clients), please get in touch with our fixed income portfolio managers Chris Ryon or Sweta Singh. They can answer any questions you may have about the municipal bond market.


The information and statistics contained in this communication have been obtained from sources we believe to be reliable but cannot be guaranteed. Any projections, market outlooks or forecasts discussed herein are forward-looking statements and are based upon certain assumptions. Other events that were not taken into account may occur and may significantly affect the returns or performance of these investments. Any projections, outlooks or assumptions should not be construed to be indicative of the actual events which will occur. These projections, market outlooks or estimates are subject to change without notice. Please remember that past performance may not be indicative of future results.
Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product, or any non-investment related content, made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. No discussion or information contained herein serves as the provision of, or as a substitute for, personalized investment advice. To the extent that a reader has any questions regarding the applicability above to his/her individual situation of any specific issue discussed, he/she is encouraged to consult with the professional advisor of his/her choosing. City Different Investments is neither a law firm nor a certified public accounting firm and no portion of this content should be construed as legal, tax, or accounting advice.

Opinions and statements of financial market trends that are based on market conditions constitute our judgment and are subject to change without notice. Historic market trends are not reliable indicators of actual future market behavior. This material may contain projections or other forward-looking statements regarding future events, targets or expectations, and is only current as of the date indicated. There is no assurance that such events or targets will be achieved and may be significantly different than that shown here. The information presented, including statements concerning financial market trends, is based on current market conditions, which will fluctuate and may be superseded by subsequent market events or for other reasons. Although the assumptions underlying the forward-looking statements that may be contained herein are believed to be reasonable, they can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. The Firm assumes no duty to provide updates to any analysis contained herein.

Visitors to the City Different Investments web and social media sites are asked to read these terms.


Sign up now to get the latest news and insights from City Different delivered directly to your inbox!