Host Ryan Nauman interviews Brad Kreidle, founder and president of MainLine West, about navigating the large, fragmented municipal bond market and why MainLine West was created to improve transparency and efficiency by operating at a wholesale level with its own broker/dealer.
Kreidle explains how higher interest rates after the ZIRP era have made municipals attractive on a taxable-equivalent basis, and how a steep municipal yield curve creates opportunities, including his firm’s “80/50” positioning concept. They discuss ways to pursue higher tax-exempt income, including leveraging high-grade municipals rather than simply moving down in credit quality, as well as sectors like housing finance (multifamily and single-family programs) and the growth of gas prepayment bonds, which can offer additional yield with good liquidity.
They also cover muni ETFs’ growth, including using large ETFs to hedge muni rate exposure, and why MainLine West uses an SMA wrapper for flexibility and leverage constraints in 40 Act funds.
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00:00 Welcome and Guest Intro
01:16 Brad and Mainline West
02:20 Why Mainline West Started
06:05 Today’s Muni Rate Backdrop
08:10 Curve Strategy and 80 50
10:35 High Yield via Leverage
12:50 Housing Bonds and Policy
14:52 Gas Prepay and Space Munis
18:17 Gas Prepay Benefits and Liquidity
23:38 Fragmented Market and Active Edge
26:57 AI and Human Judgment
27:45 Muni ETFs and Hedging
31:06 Why Use an SMA Wrapper
32:18 Where to Learn More Closing
