The structure of the municipal bond market generates pricing inefficiencies. Unlike the Treasury bond market where there is one issuer and a small set of outstanding bonds, the Municipal market has over 75,000 different Issuers and over 1 million outstanding bonds. The number of Issuers and outstanding bonds makes a liquid centralized exchange infeasible. Further, most bonds are owned by individuals in the highest marginal tax bracket. These investors are usually experts in something other than municipal bond trading. Without price transparency, inefficient transactions often occur.
Municipal Bonds
01. Сhallenge
As a result of both lack of price transparency and complexity of structure, our clients might pay too much in transaction costs and assume unintended risks.
- Lack of price transparency results in high transaction costs
- Complicated bonds structures result in unintended risks
02. Solutions
The principals at ASA have been analyzing and trading municipal bonds since 1988. We help our clients avoid hidden transaction costs while constructing safe municipal bonds portfolios that match their risk profiles.