On the surface, passive municipal ladders seem like a sensible investment. Simple. Easy. Cheap. But the numbers don’t lie.

Since 2009, the average active municipal bond manager has beaten passively managed municipal ladders in 97% of two-year rolling periods. The average outperformance? A not-so-insignificant 0.79%.

Losing out on yield and return year after year isn’t the only problem with passive muni ladders. Market risks are just as relevant and dynamic and must also be actively managed. That’s why we believe that investors need to stay nimble, not locked in.

The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams.

© 2017 AllianceBernstein L.P.

© AllianceBernstein

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