One of my favorite charts in the book is Figure 3.1 on Page 29. It really puts the high yield muni market in the proper historical perspective. Unfortunately, by this time, the data displayed in the book is almost a year old. Blame it on the publishing cycle. So here’s an updated version of the same chart, this time in glorious colors for your viewing pleasure. I am very grateful to my friends at Standard & Poor’s and Investortools for allowing the use of their data.

Updated Figure 3-1

As you can see, high yield spreads widened out further in late 2011, probably on the back of renewed Eurozone concerns, but have since tightened again. Still, the most recent spread of +402 (as of May 2012) is still quite wide compared to the historical average of +291 over the period in question.

 

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About Triet M. Nguyen

Triet Nguyen is a veteran of the fixed-income markets and a high yield/distressed municipal bond expert. Over his 32 year career, Triet has designed, marketed and managed every type of buy side investment products, from mutual funds (open and closed-end) to managed accounts and hedge funds. He is currently the managing partner of Axios Advisors LLC, an independent municipal research and investment advisory boutique specializing in high income strategies. Triet is the author of “Investing In The High Yield Municipal Market”, to be published in July 2012 by John Wiley/Bloomberg Press. He also moderates the Municipal Credit Research Forum on LinkedIn. His Twitter handle is @HighYieldPro. Before rejoining Axios (which he founded in 2002), Mr. Nguyen was a Senior Vice President at B.C. Ziegler, where he traded tax-exempt high yield and taxable municipal bonds (including Build America Bonds). From January 2004 to January 2008, he was a Managing Director of Saybrook Capital, LLC, managing one of the first ever municipal hedge funds dedicated to a credit strategy. As Director of Information Services at ebondUSA.com between 2000 and 2001, Triet contributed to the development of a pioneering online muni bond evaluation system. Prior to 2000, he was a Vice President/Portfolio Manager of the John Hancock Funds and a Senior Portfolio Manager of the Putnam Funds. Triet received a B.A. in Economics and an M.B.A. in Finance and Accounting from the University of Chicago.

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