December 2025 Performance Overview
The S&P Municipal Bond Investment Grade Index increased by 0.199, primarily driven by coupon income during a period of limited yield curve movement.
Other Highlights
- Rates and Curve Dynamics: The yield curve remained largely unchanged, with continued steepening contributing to a slightly negative non-parallel shift return
- Sector and Spread: IDR/PCR and Tobacco Settlement sectors spreads widen, while Prerefunded/ETM saw spreads tighten
- Credit Quality Performance: Lower-rated bonds underperformed as spreads widened more meaningfully across AA- and A-rated sectors
- State Performance: States with shorter durations generally outperformed; Illinois, Connecticut, Minnesota, and North Carolina were among the strongest contributors
Read the full report for an in-depth understanding of the contributions to the month’s performance as well as a “2025 Year in Review” summary.
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