(The following commentary is a summary of discussions among members of the Breckinridge Capital Advisors Investment Committee (IC) as they reviewed monthly activity in the markets and investment returns. The members of the Investment Committee, under the leadership of Co-Chief Investment Officers Matthew Buscone and Jeffrey Glenn, CFA, are Co-Heads of Research, Nicholas Elfner and Adam Stern, J.D., M.P.A.; and Portfolio Manager and Director, Corporate Research, Josh Perez, CFA.)
Market Review
Risk assets rallied sharply in April, as investors responded favorably to easing geopolitical tensions, resilient U.S. economic data, and strong corporate earnings results. A cease-fire agreement in Iran reduced near-term concerns despite elevated oil prices, with West Texas Intermediate crude ending the month near $105 per barrel. Equity markets advanced significantly during the month, led by technology-oriented sectors and growth equities.
Economic data released during April pointed to continued resilience in the U.S. economy. First quarter 2026 gross domestic product (GDP) growth rebounded to 2 percent, following disruptions associated with the government shutdown earlier in the year. Consumer spending increased 1.6 percent, while business investment rose 10.4 percent, supported by continued artificial intelligence-related capex spending. Inflation remained above the Federal Reserve’s (Fed) long-term target, with Core personal consumption expenditures (PCE) at 3.2 percent in March: the third consecutive month above 3 percent.
Treasury yields moved modestly higher across the curve in April. The 2-year Treasury yield rose 8bps while the 5-year, 10-year, and 30-year Treasury yields increased 6bps, 5bps, and 6bps, respectively (See Figure 1).4 The IC continues to expect the 10-year Treasury to remain within a 4 percent to 4.5 percent trading range, though nearer the upper end of the range given current inflation dynamics and elevated oil prices.
Bond market volatility moderated during the month, as investor sentiment improved. The ICE Bank of America/Merrill Lynch (MOVE) Index5 declined from elevated levels reached earlier in the quarter, reflecting somewhat improved confidence regarding the path of interest rates and macroeconomic conditions (See Figure 2).
The Federal Open Market Committee (FOMC) maintained a cautious stance during the month, as policymakers balanced resilient labor market conditions against persistently elevated inflation. Looking forward, the IC expects the Fed to keep rates unchanged over the near-to-medium term, given ongoing inflation pressures weighed against stable economic growth trends. Moderate economic growth, sticky inflation, and a mixed labor market backdrop support duration-neutral positioning across multi-sector strategies. Portfolio positioning continues to favor spread product relative to Treasuries, though valuations remain historically tight across many fixed income sectors. The IC also remains attentive to the potential inflationary effects of sustained higher energy prices, particularly across Europe and Asia, where imported energy costs could contribute to stagflationary risks.
Municipal Market Review
Municipal bonds rebounded in April and outperformed comparable Treasuries across much of the curve, as demand remained strong despite elevated new issue supply and seasonal tax-related pressures. The Bloomberg (BBG) Managed Money Short/Intermediate Municipal Index6 returned 0.60 percent during the month.
Municipal yields were mixed across maturities. Two-year municipal yields increased 2bps while 5-year, 10-year, and 30-year municipal yields declined 7bps, 13bps, and 15bps, respectively (See Figure 3). Outperformance was most pronounced in the 10- to 15-year portion of the curve.
M/T ratios ended April at 63 percent in 2- and 5-years, 68 percent in 10-years, and 88 percent in 30-years (See Figure 4). The IC views current valuations as broadly fair, particularly given strong retail demand and limited after-tax alternatives for many investors.
Municipal issuance totaled $54.2 billion in April, sustaining the elevated issuance volumes seen to-date in 2026. Higher construction costs, ongoing infrastructure investment needs, and declining reserve balances continue to support elevated issuance trends.
Municipal bond fund flows remained positive during the month, with inflows totaling approximately $151 million. Munis remain susceptible to a weaker technical environment, with positive net supply forecast through May and lower seasonal re-investment.
Corporate Market Review
The BBG U.S. Corporate Investment Grade Index7 returned 0.45 percent in April, as spreads tightened and investor demand remained strong. IG corporate spreads tightened 10bps during the month to 78bps. BBB-rated corporates outperformed higher quality segments, tightening 12bps versus 9bps for A-rated issuers.
Performance across sectors was mixed. Best performing sectors included Sovereigns, Health Insurance, Metals and Mining, Life Insurance, and Oil Field Services. Underperforming sectors included Supranationals, Foreign Agencies, Foreign Local Government issuers, Media Entertainment, and Environmental Services.
Corporate issuance in April totaled $193.2 billion, higher than the same period last year, supported by open primary markets and favorable financing conditions, while lower than the $228 billion issued in March 2026. Net issuance totaled approximately $61 billion after accounting for $132.2 billion in redemptions.
Credit fundamentals remained stable overall, supported by strong corporate earnings growth, resilient revenues, and continued cost discipline. Earnings before interest, taxes, depreciation, and amortization (EBITDA) margins improved modestly across many industrial sectors, while leverage metrics generally remained stable. However, the IC noted idiosyncratic risks are rising in sub-prime and non-bank lending sectors due to ongoing pressure on lower-income consumers.
Mutual fund and ETF flows remained supportive for corporate credit markets during April despite some volatility earlier in the year. Taxable bond inflows totaled approximately $39 billion over the trailing 30-day period. The IC also observed increased merger and acquisition activity, supported by elevated equity valuations, deregulation trends, and accessible capital markets, though such activity may contribute to incremental credit pressure over time.
Securitized Market Review
Securitized sectors generated positive performance during April, as declining rate volatility and stable credit fundamentals supported spread tightening across many subsectors.
Agency MBS spreads tightened modestly with higher coupon securities outperforming lower coupons as Treasury yields rose in April. The sector overall benefited from lower rate volatility and generated modest positive excess returns during the month.
Commercial mortgage-backed securities (CMBS) continued to perform well, led by non-agency sectors. Agency CMBS total returns were 0.04 percent, while non-agency CMBS returned 0.33 percent.
ABS also produced positive returns in April. ABS spreads tightened approximately 4bps overall, supported by stable earnings results from major issuers and continued investor demand for high quality spread product.
Equity Market Review
The S&P 500 advanced 10.49 percent in April, marking one of the strongest monthly gains of the past two decades. Equity markets benefited from easing geopolitical concerns, resilient economic data, and stronger-than-expected corporate earnings growth.
Equity market volatility declined during April alongside improving investor sentiment. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) declined from elevated levels experienced earlier in the quarter, as risk appetite improved and equity markets approached record highs (See Figure 5).
Performance leadership during the month was concentrated in growth-oriented sectors. Communication Services gained 18.54 percent while Information Technology advanced 17.47 percent and Consumer Discretionary rose 11.73 percent. Energy was the weakest performing sector, declining 3.46 percent despite elevated oil prices, while Health Care declined 0.45 percent and Utilities gained 2.09 percent.
From a factor perspective, high beta, high momentum, and high growth led, while low volatility, high value, and high dividend yield were the worst performers.
The Russell 1000 Value Index11 lagged the S&P 500 Index, but gains were still strong at 8.16 percent. The Russell 1000 Growth Index12 was up 11.9 percent.
Corporate earnings results remained supportive for equities. More than 60 percent of companies had reported first quarter earnings by month-end, with earnings growth tracking near 28 percent year-over-year.13 Strong results were concentrated in Materials, Consumer Discretionary, Communication Services, and Technology sectors. Bottom-up earnings estimates continued to move higher, with consensus expectations for earnings growth above 20 percent during 2026, per BBG.
[1] The Municipal/Treasury (M/T) ratio compares yields of municipal bonds with those of U.S. Treasury bonds of the same maturity. M/T ratios can show the relative value of municipal bonds compared with taxable bonds, by indicating when yields for municipal bonds exceed the after-tax yields on taxable bonds.
[2] As of April 30, 2026, as measured by the Bloomberg (BBG) U.S. Corporate Investment Grade Bond Index, an unmanaged market-value-weighted index of investment grade corporate fixed-rate debt issues with maturities of one year or more. You cannot invest directly in an index.
[3] The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. Itis a market-value-weighted index with each stock’s weight in the index proportionate to its market value. Performance is as of April 30, 2026. You cannot invest directly in an index.
[4] As of April 30, 2026, as measured by the Bloomberg (BBG) U.S. Treasury Bond Index, an unmanaged index of prices of U.S. Treasury bonds with maturities of 1 to 30 years. You cannot invest directly in an index
[5] The ICE BofA/ML Merrill Lynch Option Volatility Estimate (MOVE) Index measures U.S. interest rate volatility by tracking the movement in U.S. Treasury yield volatility implied by current prices of one-month over-the-counter options on 2-year, 5-year, 10-year and 30-year Treasuries. Historically, the index rises as concerns grow that interest rates are moving higher. You cannot invest directly in an index.
[6] Municipal bond performance is as of April 30, 2026, as measured by the BBG Managed Money Short/Intermediate (1-10) Index, which measures the performance of the publicly traded municipal bonds that cover the USD-denominated short/intermediate term tax-exempt bond market, including state and local general obligation bonds, revenue bonds, insured bonds, and pre-refunded bonds. It is rules-based, and market-value weighted. You cannot invest directly in an index.
[7] As of April 30, 2026, as measured by the BBG U.S. Corporate Investment Grade Bond Index, an unmanaged market-value-weighted index of investment grade corporate fixed-rate debt issues with maturities of one year or more. You cannot invest directly in an index.
[8] The BBG MBS Index tracks agency mortgage-backed pass-through securities (both fixed-rate and hybrid ARM) guaranteed by government-sponsored enterprises (GSEs) Government National Mortgage Association (Ginnie Mae) (GNMA), Federal National Mortgage Association (Fannie Mae) (FNMA), and Federal Home Loan Mortgage Corporation (Freddie Mac) (FHLMC). The index is constructed by grouping individual pools into aggregates or generics based on program, coupon, and vintage. You cannot invest directly in an index.
[9] The BBG U.S. CMBS Investment Grade Index measures the market of U.S. Agency (GNMA, FNMA, and (FHLMC) and U.S. Non-Agency conduit and fusion CMBS deals with a minimum current deal size of $300mn. You cannot invest directly in an index.
[10] BBG U.S. Asset-Backed Securities (ABS) Index is the ABS component of the Bloomberg U.S. Aggregate Bond Index, a flagship measure of the U.S. investment grade, fixed-rate bond market. The ABS index has three subsectors: credit and credit cards, autos, and utility. You cannot invest directly in an index.
[11] The Russell 1000® Value Index is an unmanaged market capitalization-weighted index of value-oriented stocks of U.S. domiciled companies that are included in the Russell 1000 Index. Value-oriented stocks tend to have lower price-to-book ratios and lower forecasted growth values. You cannot invest directly in an index.
[12] The Russell 1000® Growth Index is an unmanaged market capitalization-weighted index of growth-oriented stocks of U.S. domiciled companies that are included in the Russell 1000 Index. Growth-oriented stocks tend to have higher price-to-book ratios and higher forecasted growth values. You cannot invest directly in an index.
[13] Breckinridge calculation based on Bloomberg data as of April 30, 2026
BCAI – 05112026-fbe8leoq (5/11/2026)
DISCLAIMERS:
This material provides general information and should not be construed as a solicitation or offer of services or products or as legal, tax or investment advice. Nothing contained herein should be considered a guide to security selection, asset allocation or portfolio construction.
All information and opinions are current as of the dates indicated and are subject to change. Breckinridge believes the data provided by unaffiliated third parties to be reliable but investors should conduct their own independent verification prior to use. Some economic and market conditions contained herein have been obtained from published sources and/or prepared by third parties, and in certain cases have not been updated through the date hereof.
There is no assurance that any estimate, target, projection or forward-looking statement (collectively, “estimates”) included in this material will be accurate or prove to be profitable; actual results may differ substantially. Breckinridge estimates are based on Breckinridge’s research, analysis and assumptions. Other events that were not considered in formulating such projections could occur and may significantly affect the outcome, returns or performance.
Not all securities or issuers mentioned represent holdings in client portfolios. Some securities have been provided for illustrative purposes only and should not be construed as investment recommendations. Any illustrative engagement or sustainability analysis examples are intended to demonstrate Breckinridge’s research and investment process.
Yields and other characteristics are metrics that can help investors in valuing a security, portfolio or composite. Yields do not represent performance results but they are one of several components that contribute to the return of a security, portfolio or composite. Yields and other characteristics are presented gross of advisory fees.
All investments involve risk, including loss of principal. No investment or risk management strategy, including diversification, can guarantee positive results or risk elimination in any market. Periods of elevated market volatility can significantly impact the value of securities. Investors should consult with their advisors to understand how these risks may affect their portfolios and to develop a strategy that aligns with their financial goals and risk tolerances.
Past performance is not indicative of future results. Breckinridge makes no assurances, warranties or representations that any strategies described herein will meet their investment objectives or incur any profits. Performance results for Breckinridge’s investment strategies include the reinvestment of interest and any other earnings, but do not reflect any brokerage or trading costs a client would have paid. Results may not reflect the impact that any material market or economic factors would have had on the accounts during the time period. Due to differences in client restrictions, objectives, cash flows, and other such factors, individual client account performance may differ substantially from the performance presented.
Actual client advisory fees may differ from the advisory fee used to calculate net performance results. Client returns will be reduced by the advisory fees and any other expenses incurred in the management of their accounts. For example, an advisory fee of 1 percent compounded over a 10-year period would reduce a 10 percent return to a 9 percent annual return. Additional information on fees can be found in Breckinridge’s Form ADV Part 2A.
Index results are shown for illustrative purposes and do not represent the performance of any specific investment. Indices are unmanaged and investors cannot directly invest in them. They do not reflect any management, custody, transaction or other expenses, and generally assume reinvestment of dividends, income and capital gains. Performance of indices may be more or less volatile than any investment strategy.
Fixed income investments have varying degrees of credit risk, interest rate risk, default risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa.
Equity investments are volatile and can decline significantly in response to investor reception of the issuer, market, economic, industry, political, regulatory or other conditions.
BLOOMBERG® is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively “Bloomberg”). Bloomberg does not approve or endorse this material or guarantees the accuracy or completeness of any information herein, or makes any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.
The S&P500 Index (“Index”) and associated data is a product of S&P Dow Jones Indices LLC, its affiliates and/or their licensors and has been licensed for use by Breckinridge. © 2026 S&P Dow Jones Indices LLC, its affiliates and/or their licensors. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. For more information on any of S&P Dow Jones Indices LLC’s indices please visit www.spdji.com. S&P® is a registered trademark of Standard & Poor’s Financial Services LLC (“SPFS”) and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). Neither S&P Dow Jones Indices LLC, SPFS, Dow Jones, their affiliates nor their licensors (“S&P DJI”) make any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and S&P DJI shall have no liability for any errors, omissions, or interruptions of any index or the data included therein.
Subscribe to Insights
Sign up to receive curated insights directly in your inbox.
