Detroit’s bankruptcy filing means it’s time for advisors to reassess their holdings, says Warren Pierson, lead manager of Baird’s intermediate-term municipal bond fund, but not to over-react to what is sure to be a panicked client base.

“That includes individual municipal bonds as well as funds,” says Pierson, who wasn’t surprised by the Detroit bankruptcy filing and doesn’t think it’ll be sorted out any time soon. “Investors have been desperate for yield in recent years. Within fixed income, they’ve gone longer in maturity and lower in quality. Often, that has meant turning a blind eye to risk.”

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