Sage Advice Municipal Quarterly Market Review 2Q2020

Market conditions warrant patience and prudence when deploying funds as valuations are not broadly reflective of the ongoing fiscal challenges. Sage’s long-duration tilt has gradually been reduced and will be rebalanced when swap opportunities become available. Sage maintains a bullet tilt to our curve structure, due to the steep yield curve and the Fed’s ongoing support of front-end yields. Strong seasonal influences and modest new issue supply will provide a supportive backdrop to current yield and spread levels. With a higher probability of industry-wide downgrades over the coming year, sector allocation and rebalancing will remain focused on stable-to-improving sectors, including both general obligation and essential service revenue bonds rated A2 and higher. During these volatile and uncertain times, Sage remains focused on principal preservation, improving liquidity, and stable tax-free income generation.