The silver tsunami is here

US population aging is creating a powerful long-term tailwind for senior care, and we think that trend is still underappreciated in high-yield municipals.

The sector was hit hard by the pandemic and then by inflation, labor shortages, and weaker markets, but operating conditions have improved meaningfully since then. Occupancy has recovered, margins are stabilizing, and balance sheets are stronger than they were a few years ago.

At the same time, new supply has slowed as construction costs and financing have risen. That should help support pricing power and credit quality over time.

For investors seeking tax-exempt income with improving fundamentals, senior care munis now look more compelling than they have in some time.