Fixed income

Just one day after the Municipal Securities Rulemaking Board issued a draft rule on muni advisors’ fiduciary duties, market participants are questioning the scope of the rule and whether it would apply to dealer-advisers.

The $3.7 trillion fiscal 2012 budget proposed by President Obama Monday would permanently reinstate an expanded Build America Bond program but at a lower 28% subsidy rate.

The enhanced system will provide more than 30 data points on each bond, with performance information going back 10 years.

Municipal bond mutual funds in the period ending Feb. 9 saw heavy withdrawals for the 13th consecutive week.

Tax-exempt money market funds recouped most of last week’s losses, adding $2 billion and finishing with $326.39 billion in total net assets for the week ended Feb. 7, according to the Money Fund Report, a service of iMoneyNet.com.

As the expiration of the Build America Bond program loomed last year, the market was wracked with uncertainty about just who was going to buy long-term tax-exempt bonds. Thanks to the drought of new municipal bond issuance in 2011, the market is still wondering.

Retail investors in municipals are shaken, but still ­standing, after a relentless barrage of ­negative media hype surrounding forecasts for massive municipal ­bankruptcies and defaults later this year.

The recent media firestorm over state and local government finances has resulted in heightened efforts by those in the municipal bond industry to educate jittery investors and enhance disclosure in the nearly $3 trillion market.

If interest rates can only go up from here, shouldn’t you minimize your exposure to bonds? Not according to Zane Brown, a fixed-income strategist from Lord Abbott who addressed a crowd of advisors at the IMCA New York Consultants Conference.

Five days before a House panel is set to hold a hearing — “State and Municipal Debt: the Coming Crisis?” — governors are insisting that municipal securities are among the safest investments and that states are keenly aware of the need to repay their obligations.

Tax-exempt money market funds fell $2.34 billion to $324.39 billion in net assets in the week ended Jan. 31, according to the Money Fund Report.

The risk-management and trade analytics service announced the launch Tuesday of a service evaluating the illiquidity of municipal bond mutual fund holdings.

The Municipal Securities Rulemaking Board plans to seek public comment on a series of new rules and interpretive guidance in the next four to six weeks, most of which stem from its new oversight of muni advisors

Municipal bond mutual fund outflows moderated last week as a nervous market seemed better able to absorb the relentless fund selling.

To calm frightened investors pulling out of muni-bond funds, Vanguard, which manages $115 billion in municipal bonds, has been tweeting excerpts from a new research commentary "California is Not Greece."

Investors in tax-exempt debt should be cautious about heeding recent reports about the possibility of widespread bankruptcy and default in the municipal market, and stop running away from solid, safe investments because of distorted opinions in the media.

Volatility and speculation about defaults and bankruptcies in the municipal market continue to spook issuers and investors, affecting volume in the primary market.

Tax-exempt money market funds posted their first decline since mid-December as outflows of $4.35 billion trimmed total net assets to $329.91 billion for the week ended Jan. 17, according to the Money Fund Report, a service of iMoneyNet.com.

The sophisticated investor in retail municipal bonds has ­remained calm the past few months even as mutual funds have dumped state and local ­government debt by the truckload.

The Securities and Exchange Commission approved two sets of rules for asset-backed securities Thursday, including one that would apply to certain municipal securities in early 2015.