Navigating Market Dynamics: Nomura's Municipal Bond Triumph
Exceeding Expectations: Fund's Q2 Performance Highlights
In the second quarter of 2026, the Nomura National High-Yield Municipal Bond Fund's Institutional Class shares delivered an impressive return of 3.60%. This performance notably surpassed its benchmark, the Bloomberg Municipal Bond Index, which posted a return of 2.50%. The fund's outperformance by 110 basis points (where one basis point equals one-hundredth of a percentage point) underscores its strategic positioning and effective management during this period. This achievement is particularly significant as it occurred within a positive return environment for the broader U.S. municipal bond market.
Treasury Yield Trends and Market Impact
The second quarter of 2026 witnessed a general upward trend in U.S. Treasury yields. Specifically, the 5-year segment experienced a rise of 24 basis points, the 10-year segment increased by 11 basis points, and the 30-year segment saw a marginal increase of 1 basis point. Such movements in Treasury yields often influence the municipal bond market, making the fund's robust performance even more commendable given these market conditions.
Strategic Allocations: Boosting Performance
A key contributor to the fund's superior performance was its strategic overweight allocation to long-duration bonds, specifically those with maturities of 22 years or more. This tactical decision capitalized on market movements, demonstrating the fund management team's foresight and ability to generate alpha. The successful navigation of the interest rate landscape, combined with targeted credit exposures, played a crucial role in achieving these favorable results for investors.
