Vanguard’s Malloy Says Muni Yields Bolster Second-Half Outlook

Attractive yields and strong credit fundamentals are setting the municipal bond market up for a solid second half of the year, said Paul Malloy, the head of municipals at The Vanguard Group Inc.

Investors in the highest tax bracket can collect a broad muni-market yield of 3.62%, equivalent to 6.1% on a taxable security. The latter surpasses US corporate bonds, yielding 5.26% and having a higher default rate.

“You’ve got some really good yield back into the muni market and you’ve got a pretty steep curve,” Malloy, who oversees $300 billion in muni assets, said in an ...