You are not alone! Whereas the average investor can easily find historical stock prices, investors often become frustrated when searching for historical muni bond prices due to market illiquidity and patchy reporting standards.
Determining an Accurate Price
Typically, less than 1.5% of all municipal bonds trade on a given day making it nearly impossible for an investor to find a timely historical trade as a reference point to then determine an accurate price. With over 50,000 issuers of municipal bonds and 1.8 million outstanding issues, that is a lot of bonds without a historical reference price.
The solution is estimated (or ‘evaluated’) prices. This approach uses algorithmic models to extrapolate the activity in the liquid part of the market (the 1.5% that do trade regularly) to those bonds that don’t trade. Looking at trade information from the same or similar issuers and adjusting for key features such as coupon, maturity, sector and credit rating, allows a price to be estimated for illiquid securities.
The trouble is, up until a few years ago the production of these evaluated prices was dominated by a small number of large vendors servicing the institutional marketplace. It was typically difficult and expensive to get hold of these prices if you were a retail investor, or only wanted a small number of data points.
This is where BondView’s Tax Valuation Report comes in. For bonds that don’t trade frequently, BondView’s algorithmic model provides estimated prices by reviewing the trading of similar bonds by features including coupon, maturity, sector, rating, state and tax treatment. BondView’s pricing algorithms are calculated based on Financial Accounting Standards Board guidelines (Topic 820 formerly known as FAS 157) and have been back-tested across an extensive repository of municipal bond data. The result is dependable pricing.
Example BondView price chart
As an independent unbiased firm servicing the retail market, BondView understands that small investors do not need or want large-scale, long-term data contracts for their tax returns. They want a limited set of prices for one-off use in an easy to consume and cost-effective way without ongoing contract or subscription commitments.
To meet this requirement, BondView has made available a package of historical pricing information for all 1.8 million municipal bonds. Historical prices are packaged into easily downloadable, cost-effective reports, in 20 bond chunks. This enables retail investors, accountants, and financial advisors to easily obtain historical muni bond prices for tax assessment purposes and in the event of conditional puts – death of holder, and not pay the earth to get them.
Further details can be found at: https://www.bondview.com/tax-season
More Information: Contact Jim Walker, BondView.
Sales@Bondview.com, PH 866-261-9533.