Market participants and observers have been expecting an increase in the Federal Funds rate for some time, and it seems that the Fed will finally implement a one-quarter percent (25 basis points) increase in December. The rate increase has been so widely anticipated that bond market participants won’t be surprised by the move; in fact it appears that the rate increase may already be reflected to some extent in bond prices.
The Federal Funds rate has been unchanged since 2008, and as a result, there may be many bond investors who could benefit from a review of past periods of rising rates and the range of resulting market and price responses.
When you open any one of the single-state municipal bond fund pages on this site, under Featured Publications you will find Historic Rate and Price Variation with an illustration of Past Periods of Rising Interest Rates. It is worthwhile to review the impact that those past periods of rising rates had on the value of shares in the municipal bond funds, each of which follows a high-quality, intermediate maturity strategy in order to manage credit and interest rate risk.
When the Fed does raise rates, the investing landscape will change, creating a range of investment opportunities in the process. We encourage you to review our investment strategies and how those strategies have performed in past periods of rising rates.
Before investing in one of the Aquila Group of Funds, carefully read about and consider the investment objectives, risks, charges, expenses, and other information found in the Fund prospectus. The prospectus is available on this site, from your financial advisor, or by calling 800-437-1020.