Summary

• California municipal bonds (munis) declined for the quarter. Surging interest rates in March largely drove the quarter's decline.
• First-quarter municipal bond issuance totaled $127.8 billion, down from $142 billion in the fourth quarter but up nearly 6% from a year earlier, according to SIFMA.
• Sector weightings drove the portfolio's outperformance compared with the benchmark, largely due to an underweight position relative to the benchmark in an underperforming security in the industrial development revenue/pollution control revenue sector.
• With valuations appearing tight, we remain cautious and selective, favoring seasoned credits with significant financial flexibility.

Market Review

California munis declined. California municipal bonds (munis) declined for the quarter. Surging interest rates in March largely drove the quarter's decline. The volatile period included renewed tariff concerns, a Federal Reserve policy pause, mixed economic data, war in Iran and

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