Taxable Munis Stand Out in Volatile Markets

Dan Close - Head of Municipals
Kristen M. DeJong - Portfolio Manager
Philip C. Traven - Portfolio Manager

Taxable municipal bonds proved their resilience in the first quarter of 2026, outperforming other fixed income asset classes despite sharp rate moves and rising geopolitical uncertainty. With yields near historic highs, solid credit fundamentals and limited supply, we believe the case for municipals is strong.

Key takeaways

• Active sector selection in health care and transportation may capture additional yield that we believe more than adequately compensates investors for the underlying credit risk.
• Rebounding demand and limited supply are expected to favor municipal total returns through year end.
• The shape of the taxable muni yield curve, with narrowing yields featured on the long end, may reward investors who favor intermediate dated bonds.

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Disclosures
This material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy, sell or hold a security or investment strategy and is not provided in a fiduciary capacity. The information provided does not take into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on an investor's objectives and circumstances and in consultation with their financial advisors. Financial professionals should independently evaluate the risks associated with products or services and exercise independent judgment with respect to their clients.
 
Nuveen, LLC provides investment solutions through its investment specialists.
 
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