Infographic: The Investment Case for Taxable Municipal Bonds
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Taking Advantage of the Infrastructure Boom: The Case for Taxable Municipal Bonds

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Taxable municipal bonds infographic

The Case for Taxable Municipal Bonds for Investors

If you’re a homeowner, there are probably a few things you’ve been neglecting to do. Perhaps the kitchen needs upgrading, or the roof needs replacing. We tend to procrastinate on these improvements due to large renovation costs, until it hits a point where we can’t ignore them anymore. This is the state that U.S. infrastructure has reached—on a national scale.

Today’s infographic from New York Life Investments highlights the level of disrepair in U.S. infrastructure. It also explores why taxable municipal bonds, which will finance the required infrastructure upgrades, provide such an interesting investment opportunity.

Falling Apart at the Seams

The American Society of Civil Engineers (ACSE) regularly assesses the nation’s infrastructure—things like bridges, airports, and drinking water—and scores it in a ‘report card’. After decades of neglect, the U.S. only scored a D+ in 2017.

The ASCE estimates that $4 trillion is needed to bring infrastructure up to a B grade, $1.3 trillion of which will be provided by state and local governments.

The urgent needs for increased investment in America’s infrastructure continue to grow and our nation’s economic vitality and quality of life are at stake.

— Ed Mortimer, U.S. Chamber Vice President of Transportation and Infrastructure

U.S. municipal bonds will be the primary funding source for this massive financing need. These bonds are quite popular with individual U.S. investors, as the interest income from most municipal bonds is not subject to federal income tax.

However, the U.S. tax code limits the volume of non-taxable bonds issued, and the purposes for issuing them. As a result, many local and state governments have been turning to taxable municipal bonds to finance their infrastructure projects.

The Muni Opportunity

Taxable municipal bonds are a potentially attractive investment for many reasons.

1. Competitive Historical Yield and Strong Returns
In the last decade, a lagging global economy led to historically low interest rates—many sovereign (national) bonds fell into negative territory. Taxable municipal bonds provided an alternative source of yield potential, outpacing the yields of comparable treasury bonds in some cases.

Not only that, but in the post-crisis era, taxable municipal bonds have averaged a return of 6.9% per year, beating the 4.6% performance on U.S. corporate investment-grade bonds, a staple in most institutional portfolios.

2. High-Quality, Stable Credit Ratings
Most municipal bonds are high quality with low default rates, making them attractive to risk-conscious investors.

 U.S. MunicipalsGlobal Corporates
Rating SpreadOver 76% rated A+ or betterOnly about 10% are AA rated
Tiny portion below investment gradeNearly half are below investment grade
Default Rate0.81% for those rated BAA by S&P0.84% for those rated AAA by S&P

Historically, municipal bond ratings have also been far more stable than that of global corporates.

3. Inefficient pricing
The municipal bond market is highly fragmented, and most issues are too small to be included in a market index.

This market fragmentation, combined with limited sell-side research and many buy-and-hold investors, often leads to inefficient pricing. Active investors have the potential to generate higher returns by applying their credit research and trading skills.

4. Low Correlations
Correlation measures the degree to which two securities move in relation to each other. In general, taxable municipal bonds have a low correlation to other fixed-income sectors. This means they help provide portfolio diversification and reduce volatility.

5. Longer durations
Since taxable municipal bonds fund long-term capital projects, they are usually financed with longer maturing bonds. Institutional investors welcome this source of long-duration assets, as they can match them up with their long-dated obligations.

A Compelling Portfolio Addition

Taxable municipal bonds have many positive qualities that make them a strong contender for investment. When added to a diversified fixed-income portfolio, they may also improve the risk/return profile.

As the U.S. begins to revitalize its infrastructure, taxable municipal bonds present a strong—and often overlooked—opportunity for investors.

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30 Years of Gun Manufacturing in America

The U.S. has produced nearly 170 million firearms over the past three decades. Here are the numbers behind America’s gun manufacturing sector.

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gun manufacturing in america

30 Years of Gun Manufacturing in America

While gun sales have been brisk in recent years, the uncertainty surrounding COVID-19 was a boon for the gun industry.

From 2010-2019, an average of 13 million guns were sold legally in the U.S. each year. In 2020 and 2021, annual gun sales sharply increased to 20 million.

While the U.S. does import millions of weapons each year, a large amount of firearms sold in the country were produced domestically. Let’s dig into the data behind the multi-billion dollar gun manufacturing industry in America.

Gun Manufacturing in the United States

According to a recent report from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the U.S. has produced nearly 170 million firearms over the past three decades, with production increasing sharply in recent years.

firearms per 100000 persons

America’s gunmakers produce a wide variety of firearms, but they’re generally grouped into five categories; pistols, rifles, shotguns, revolvers, and everything else.

Below is a breakdown of firearms manufactured in the country over the past 30 years, by type:

Year     PistolsRiflesRevolversShotgunsMisc. FirearmsTotal Firearms
19891,404,7531,407,400628,573935,54142,1264,418,393
19901,371,4271,211,664470,495848,94857,4343,959,968
19911,378,252883,482456,966828,42615,9803,563,106
19921,669,5371,001,833469,4131,018,20416,8494,175,836
19932,093,3621,173,694562,2921,144,94081,3495,055,637
19942,004,2981,316,607586,4501,254,92610,9365,173,217
19951,195,2841,411,120527,6641,173,6458,6294,316,342
1996987,5281,424,315498,944925,73217,9203,854,439
19971,036,0771,251,341370,428915,97819,6803,593,504
1998960,3651,535,690324,390868,63924,5063,713,590
1999995,4461,569,685335,7841,106,99539,8374,047,747
2000962,9011,583,042318,960898,44230,1963,793,541
2001626,8361,284,554320,143679,81321,3092,932,655
2002741,5141,515,286347,070741,32521,7003,366,895
2003811,6601,430,324309,364726,07830,9783,308,404
2004728,5111,325,138294,099731,76919,5083,099,025
2005803,4251,431,372274,205709,31323,1793,241,494
20061,021,2601,496,505385,069714,61835,8723,653,324
20071,219,6641,610,923391,334645,23155,4613,922,613
20081,609,3811,734,536431,753630,71092,5644,498,944
20091,868,2582,248,851547,195752,699138,8155,555,818
20102,258,4501,830,556558,927743,37867,9295,459,240
20112,598,1332,318,088572,857862,401190,4076,541,886
20123,487,8833,168,206667,357949,010306,1548,578,610
20134,441,7263,979,570725,2821,203,072495,14210,844,792
20143,633,4543,379,549744,047935,411358,1659,050,626
20153,557,1993,691,799885,259777,273447,1319,358,661
20164,720,0754,239,335856,291848,617833,12311,497,441
20173,691,0102,504,092720,917653,139758,6348,327,792
20183,881,1582,880,536664,835536,1261,089,9739,052,628
20193,046,0131,957,667580,601480,735946,9297,011,945
Total60,804,84059,796,76015,826,96426,241,1346,298,415168,968,113

Pistols (36%) and rifles (35%) are the dominant categories, and over time, the former has become the most commonly produced firearm type.

In 2001, pistols accounted for 21% of firearms produced. Today, nearly half of all firearms produced are pistols.

Who is Producing America’s Firearms?

There are a wide variety of firearm manufacturing companies in the U.S., but production is dominated by a few key players.

Here are the top 10 gunmakers in America, which collectively make up 70% of production:

RankFirearm ManufacturerGuns Produced (2016-2020)Share of total
1Smith & Wesson Corp8,218,19917.2%
2Sturm, Ruger & Company, Inc8,166,44817.1%
3Sig Sauer Inc3,660,6297.7%
4Freedom Group3,045,4276.4%
50 F Mossberg & Sons Inc2,223,2414.7%
6Taurus International Manufacturing1,996,1214.2%
7WM C Anderson Inc1,816,6253.8%
8Glock Inc1,510,4373.2%
9Henry RAC Holding Corp1,378,5442.9%
10JIE Capital Holdings / Enterprises1,258,9692.6%
Total33,274,64069.7%

One-third of production comes from two publicly-traded parent companies: Smith & Wesson (NYSE: RGR), and Sturm, Ruger & Co. (NASDAQ: SWBI)

Some of these players are especially dominant within certain types of firearms. For example:

  • 58% of pistols were made by Smith & Wesson, Ruger, and SIG SAUER (2008–2018)
  • 45% of rifles were made by Remington*, Ruger, and Smith & Wesson (2008–2018)

*In 2020, Remington filed for Chapter 11 bankruptcy protection, and its assets were divided and sold to various buyers. The Remington brand name is now owned by Vista Outdoor (NYSE: VSTO)

The Geography of Gun Manufacturing

Companies that manufacture guns hold a Type 07 license from the ATF. As of 2020, there are more than 16,000 Type 07 licensees across the United States.

Below is a state-level look at where the country’s licensees are located:

StateLicenses (2000)Licenses (2020)PopulationLicenses per 100,000 pop. (2020)
Alaska8117733,39116.0
Alabama402765,039,8775.5
Arkansas283023,011,52410.0
Arizona1009597,276,31613.2
California15962039,237,8361.6
Colorado274815,812,0698.3
Connecticut711943,605,9445.4
Delaware010989,9481.0
Florida1311,00921,781,1284.6
Georgia5251010,799,5664.7
Hawaii0111,455,2710.8
Iowa111873,190,3695.9
Idaho383581,839,10619.5
Illinois4026312,671,4692.1
Indiana392806,805,9854.1
Kansas172292,937,8807.8
Kentucky222114,505,8364.7
Louisiana202584,657,7575.5
Massachusetts672636,984,7233.8
Maryland361466,165,1292.4
Maine131071,362,3597.9
Michigan4338610,050,8113.8
Minnesota632545,707,3904.5
Missouri624016,168,1876.5
Mississippi121902,961,2796.4
Montana242401,084,22522.1
North Carolina5262810,551,1626.0
North Dakota346779,0945.9
Nebraska15911,961,5044.6
New Hampshire251881,377,52913.6
New Jersey10269,267,1300.3
New Mexico181792,117,5228.5
Nevada452763,104,6148.9
New York3529919,835,9131.5
Ohio8064411,780,0175.5
Oklahoma374233,959,35310.7
Oregon552264,237,2565.3
Pennsylvania8751912,964,0564.0
Rhode Island1201,097,3791.8
South Carolina252845,190,7055.5
South Dakota1479886,6678.9
Tennessee763526,975,2185.0
Texas1502,02229,527,9416.8
Utah334783,271,61614.6
Virginia484128,642,2744.8
Vermont1585643,07713.2
Washington493517,738,6924.5
Wisconsin383065,895,9085.2
West Virginia201151,793,7166.4
Wyoming20147576,85125.5

These manufacturers are located all around the country, so these numbers are somewhat reflective of population. Unsurprisingly, large states like Texas and Florida have the most licensees.

Sorting by the number of licensees per 100,000 people offers a different point of view. By this measure, Wyoming, Montana, and Idaho come out on top.

If recent sales and production trends are any indication, these numbers may only continue to grow.

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Made in America: Goods Exports by State

The U.S. exported $1.8 trillion worth of goods in 2021. This infographic looks at where that trade activity took place across the nation.

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Made in America: Goods Exports by State

After China, the U.S. is the next largest exporter of goods in the world, shipping out $1.8 trillion worth of goods in 2021—an increase of 23% over the previous year.

Of course, that massive number doesn’t tell the whole story. The U.S. economy is multifaceted, with varying levels of trade activity taking place all across the nation.

Using the latest data on international trade from the U.S. Census Bureau and the U.S. Bureau of Economic Analysis, we’ve visualized the value of America’s goods exports by state.

Top 10 Exporter States

Here are the top 10 American states that exported the highest dollar value worth of goods during 2021. Combined, these export-leading states represent 59.4% of the nation’s total exports.

RankStateTotal Exports Value% share
#1Texas$375.3 billion21.4%
#2California$175.1 billion10.0%
#3New York$84.9 billion 4.8%
#4Louisiana $76.8 billion4.4%
#5Illinois$65.9 billion3.8%
#6Michigan$55.5 billion3.2%
#7Florida$55.5 billion3.2%
#8Washington$53.6 billion3.1%
#9Ohio$50.4 billion2.9%
#10New Jersey$49.5 billion2.8%
Top 10 States$1.04 trillion59.4%

Texas has been the top exporting state in the U.S. for an incredible 20 years in a row.

Last year, Texas exported $375 billion worth of goods, which is more than California ($175 billion), New York ($85 billion), and Louisiana ($77 billion) combined. The state’s largest manufacturing export category is petroleum and coal products, but it’s also important to mention that Texas led the nation in tech exports for the ninth straight year.

California was the second highest exporter of goods in 2021 with a total value of $175 billion, an increase of 12% from the previous year. The state’s main export by value was computer and electronic product manufacturing, representing 17.8% of the total U.S. exports of that industry. California was also second among all states in exports of machinery manufacturing, accounting for 13.9% of the U.S. total.

What Type of Goods are Exported?

Here is a breakdown of the biggest U.S. export categories by value in 2021.

RankProduct GroupAnnual Export Value (2021)Share of Total Exports
1Mineral fuels including oil$239.8 billion13.7%
2Machinery including computers$209.3 billion11.9%
3Electrical machinery, equipment$185.4 billion10.6%
4Vehicles$122.2 billion7.0%
5Optical, technical, medical apparatus$91.7 billion5.2%
6Aircraft, spacecraft$89.1 billion5.1%
7Gems, precious metals $82.3 billion4.7%
8Pharmaceuticals$78 billion4.4%
9Plastics, plastic articles$74.3 billion4.2%
10Organic chemicals$42.9 billion2.4%

These top 10 export categories alone represent almost 70% of America’s total exports.

The biggest grower among this list is mineral fuels, up by 59% from last year. Pharmaceuticals saw the second biggest one-year increase (45%).

Top 10 U.S. Exports by Country of Destination

So who is buying “Made in America” products?

Unsurprisingly, neighboring countries Canada (17.5%) and Mexico (15.8%) are the two biggest buyers of American goods. Together, they purchase one-third of American exports.

RankDestination CountryShare of U.S. Goods Exports
1🇨🇦 Canada17.5%
2🇲🇽 Mexico15.8%
3🇨🇳 China8.6%
4🇯🇵 Japan4.3%
5🇰🇷 South Korea3.7%
6🇩🇪 Germany3.7%
7🇬🇧 United Kingdom3.5%
8 🇳🇱 Netherlands3.1%
9🇧🇷 Brazil2.7%
10🇮🇳 India2.3%

Three Asian countries round out the top five list: China (8.6%), Japan (4.3%), and South Korea (3.7%). Together, the top five countries account for around half of all goods exports.

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