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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The Best Selling Vehicles in America, By State

From Fords in the Midwest to Toyotas on the coasts, here are the best selling vehicles in America, visualized by state.

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The Best Selling Cars in America, By State Shareable

The Best Selling Vehicles in America, By State

From Ford trucks in the Midwest to Toyotas on the coasts, the best selling vehicles in America reveal a lot about the country.

Compared to other countries with fewer highways or narrower roads, the U.S. is very much a truck-friendly country. Across the U.S., the most sold vehicle in 2019 was the Ford F-Series of trucks, primarily the F-150.

As the home of the world’s pioneer automotive manufacturers, including Ford and GM, consumers primarily purchase local brands. But that hasn’t stopped Toyota, the largest foreign manufacturer in the world, from also gaining a foothold.

This graphic uses 2020 sales data from automotive information resource Edmunds.com, breaking down the best selling vehicles in each state through new vehicle retail registration.

What Are the Best Selling Vehicles in Each State?

Despite a slowdown in vehicle sales due to the COVID-19 pandemic and a global chip shortage, Americans still bought plenty of trucks last year.

In fact, 48 out of the 50 states had a truck or SUV as the top selling vehicle in 2020—and most states actually had trucks taking all of the top three spots. The only two with a car topping the leaderboard were California and Florida.

Top Selling Vehicle By State (2020)#1#2#3
AlabamaFord F-SeriesChevrolet SilveradoToyota Camry
AlaskaRam 1500-3500Ford F-SeriesChevrolet Silverado
ArizonaRam 1500-3500Ford F-SeriesChevrolet Silverado
ArkansasRam 1500-3500Ford F-SeriesChevrolet Silverado
CaliforniaHonda CivicToyota RAV4Toyota Camry
ColoradoFord F-SeriesRam 1500-3500Toyota RAV4
ConnecticutHonda CR-VToyota RAV4Subaru Forester
D.C.Toyota RAV4Honda CR-VSubaru Forester
DelawareFord F-SeriesChevrolet SilveradoRAM 1500-3500
FloridaToyota CorollaFord F-SeriesToyota RAV4
GeorgiaFord F-SeriesChevrolet SilveradoRAM 1500-3500
HawaiiToyota TacomaToyota 4RunnerToyota RAV4
IdahoFord F-SeriesRAM 1500-3500Chevrolet Silverado
IllinoisFord F-SeriesHonda CR-VChevrolet Silverado
IndianaChevrolet SilveradoFord F-SeriesChevrolet Equinox
IowaChevrolet SilveradoFord F-SeriesRAM 1500-3500
KansasFord F-SeriesChevrolet SilveradoRAM 1500-3500
KentuckyChevrolet SilveradoFord F-SeriesRAM 1500-3500
LouisianaFord F-SeriesChevrolet SilveradoRAM 1500-3500
MaineFord F-SeriesChevrolet SilveradoRAM 1500-3500
MarylandToyota RAV4Ford F-SeriesHonda CR-V
MassachusettsToyota RAV4Honda CR-VFord F-Series
MichiganFord F-SeriesChevrolet EquinoxRAM 1500-3500
MinnesotaChevrolet SilveradoFord F-SeriesRAM 1500-3500
MississippiFord F-SeriesChevrolet SilveradoRAM 1500-3500
MissouriFord F-SeriesChevrolet SilveradoRAM 1500-3500
MontanaFord F-SeriesRAM 1500-3500Chevrolet Silverado
NebraskaFord F-SeriesChevrolet SilveradoRAM 1500-3500
NevadaRam 1500-3500Ford F-SeriesToyota RAV4
New HampshireFord F-SeriesChevrolet SilveradoToyota RAV4
New JerseyHonda CR-VHonda CivicToyota RAV4
New MexicoFord F-SeriesRAM 1500-3500Chevrolet Silverado
New YorkHonda CR-VToyota RAV4Jeep Cherokee
North CarolinaFord F-SeriesChevrolet SilveradoRAM 1500-3500
North DakotaFord F-SeriesChevrolet SilveradoRAM 1500-3500
OhioFord F-SeriesRAM 1500-3500Chevrolet Silverado
OklahomaFord F-SeriesRAM 1500-3500Chevrolet Silverado
OregonToyota RAV4Ford F-SeriesRAM 1500-3500
PennsylvaniaFord F-SeriesRAM 1500-3500Honda CR-V
Puerto RicoToyota RAV4Toyota YarisToyota Corolla
Rhode IslandToyota RAV4Honda CR-VFord F-Series
South CarolinaFord F-SeriesChevrolet SilveradoRAM 1500-3500
South DakotaFord F-SeriesRAM 1500-3500Chevrolet Silverado
TennesseeFord F-SeriesChevrolet SilveradoRAM 1500-3500
TexasFord F-SeriesChevrolet SilveradoRAM 1500-3500
UtahFord F-SeriesRAM 1500-3500Chevrolet Silverado
VermontFord F-SeriesToyota RAV4RAM 1500-3500
VirginiaFord F-SeriesToyota RAV4Honda CR-V
WashingtonToyota RAV4Ford F-SeriesRam 1500-3500
West VirginiaFord F-SeriesChevrolet SilveradoRam 1500-3500
WisconsinFord F-SeriesChevrolet SilveradoRam 1500-3500
WyomingRam 1500-3500Ford F-SeriesChevrolet Silverado

The Ford F-Series was the clear leader in sales, primarily in the Midwest. With a top-selling spot in 60% of U.S. states, the F-Series was the best selling vehicle in America.

Combined with the Chevrolet Silverado and Ram 1500-3500 series, the big three American truck brands accounted for 73% of the top three selling vehicles across all American states and territories.

Japanese Automakers in the Mix

Though American manufacturers had the best selling cars in most states, they had some overseas competition.

Japanese manufacturers Toyota and Honda had the top-selling vehicle in 11 states (and D.C.). They primarily captured car sales along the coastlines, including in California, Florida, New York and Washington, some of the most populated states in the country.

America's Best Selling Vehicles (2020)Type# Times in Top 3
Ford F-SeriesTruck45
Ram 1500-3500Truck36
Chevrolet SilveradoTruck33
Toyota RAV4SUV18
Honda CR-VSUV10
Chevrolet EquinoxSUV2
Honda CivicCar2
Subaru ForesterSUV2
Toyota CamryCar2
Toyota CorollaCar2
Jeep CherokeeSUV1
Toyota 4RunnerSUV1
Toyota TacomaTruck1
Toyota YarisCar1

Despite many cars being available for sale in the U.S., only seven manufacturers made the top-selling vehicles list in 2020.

  • Ford
  • Ram
  • Chevrolet
  • Toyota
  • Honda
  • Subaru
  • Jeep

With the full effects of the COVID-19 pandemic yet to be reflected in the sales, and electric vehicle manufacturers like Tesla on the rise, how will the best selling vehicles in America evolve?

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Ranked: Big Tech CEO Insider Trading During the First Half of 2021

Big Tech is worth trillions, but what are insiders doing with their stock? We breakdown Big Tech CEO insider trading during the first half of 2021.

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Big Tech CEO Insider Trading During The First Half of 2021

When CEOs of major companies are selling their shares, investors can’t help but notice.

After all, these decisions have a direct effect on the personal wealth of these insiders, which can say plenty about their convictions with respect to the future direction of the companies they run.

Considering that Big Tech stocks are some of the most popular holdings in today’s portfolios, and are backed by a collective $5.3 trillion in institutional investment, how do the CEOs of these organizations rank by their insider selling?

CEOStockShares Sold H1 2021Value of Shares ($M)
Jeff BezosAmazon (AMZN)2.0 million$6,600
Mark ZuckerbergFacebook (FB)7.1 million$2,200
Satya NadellaMicrosoft (MSFT)278,694
$65
Sundar PichaiGoogle (GOOGL)27,000$62
Tim CookApple (AAPL)0$0

Breaking Down Insider Trading, by CEO

Let’s dive into the insider trading activity of each Big Tech CEO:

Jeff Bezos

During the first half of 2021, Jeff Bezos sold 2 million shares of Amazon worth $6.6 billion.

This activity was spread across 15 different transactions, representing an average of $440 million per transaction. Altogether, this ranks him first by CEO insider selling, by total dollar proceeds. Bezos’s time as CEO of Amazon came to an end shortly after the half way mark for the year.

Mark Zuckerberg

In second place is Mark Zuckerberg, who has been significantly busier selling than the rest.

In the first half of 2021, he unloaded 7.1 million shares of Facebook onto the open market, worth $2.2 billion. What makes these transactions interesting is the sheer quantity of them, as he sold on 136 out of 180 days. On average, that’s $12 million worth of stock sold every day.

Zuckerberg’s record year of selling in 2018 resulted in over $5 billion worth of stock sold, but over 90% of his net worth still remains in the company.

Satya Nadella

Next is Satya Nadella, who sold 278,694 shares of Microsoft, worth $234 million. Despite this, the Microsoft CEO still holds an estimated 1.6 million shares, which is the largest of any insider.

Microsoft’s stock has been on a tear for a number of years now, and belongs to an elite trillion dollar club, which consists of only six public companies.

Sundar Pichai

Fourth on the list is Sundar Pichai who has been at the helm at Google for six years now. Since the start of 2021, he’s sold 27,000 shares through nine separate transactions, worth $62.5 million. However, Pichai still has an estimated 6,407 Class A and 114,861 Class C shares.

Google is closing in on a $2 trillion valuation and is the best performing Big Tech stock, with shares rising 60% year-to-date. Their market share growth from U.S. ad revenues is a large contributing factor.

Tim Cook

Last, is Tim Cook, who just surpassed a decade as Apple CEO.

During this time, shares have rallied over 1,000% and annual sales have gone from $100 billion to $347 billion. That said, Cook has sold 0 shares of Apple during the first half of 2021. That doesn’t mean he hasn’t sold shares elsewhere, though. Cook also sits on the board of directors for Nike, and has sold $6.9 million worth of shares this year.

Measuring Insider Selling

All things equal, it’s desirable for management to have skin in the game, and be invested alongside shareholders. It can also be seen as aligning long-term interests.

A good measure of insider selling activity is in relation to the existing stake in the company. For example, selling $6.6 billion worth of shares may sound like a lot, but when there are 51.7 million Amazon shares remaining for Jeff Bezos, it actually represents a small portion and is probably not cause for panic.

If, however, executives are disclosing large transactions relative to their total stakes, it might be worth digging deeper.

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