Investors Have Reason to Celebrate at the US Open

investors have reason to celebrate at the us open. the us open, the fourth and final grand slam tournament of the year, is currently underway in new york. this event holds a special reputation among swiss investors. novak djokovic, jannik sinner, carlos alcaraz, alexander zverev, and daniil medvedev—some of the world’s top-ranked tennis players—have been competing at the us open since this week. however, the tournament is missing one of its biggest stars, rafael nadal, who unfortunately had to withdraw due to injury. the venue: arthur ashe stadium, built in 1997, is the largest tennis stadium in the world. the court can accommodate 23,771 spectators. a popular investment for swiss pension funds. the arthur ashe stadium is well-known among investors in switzerland. bny investments includes it in their offerings. «infrastructure investments are particularly popular with pension funds because they tend to be long-term and generate good returns», says martin rees, who is in charge of business in switzerland, liechtenstein, and austria. infrastructure investments have a long tradition in the united states. as early as 1812, the city of new york issued a «general obligation bond» to finance a canal, marking the first municipal bond in america. the arthur ashe stadium in new york (image: shutterstock). ideal for diversification. the model caught on. today, all u.s. states issue such municipal bonds, which fund projects for the public good. the largest issuers include california, new york, texas, and florida. jeffrey burger, senior portfolio manager at bny investments says:«in many cases, these bonds are directly linked to the revenue sources of the underlying infrastructures or are backed by the tax revenues of the respective state. for investors, they are also an excellent way to diversify portfolios without sacrificing returns». one such project is the venue for the us open. the stadium was financed in 1994 through a $150 million municipal bond issued by the new york city industrial development agency, combined with approximately $112 million in equity contributions from the usta ntc, a nonprofit organization. other components of the 1994 bond issuance include the construction and renovation of additional tennis courts within the complex, parking lots, and auxiliary facilities. potential underestimated. burger notes that despite the long history of u.s. municipal bonds, the market remains under-researched, creating numerous value opportunities for global investors. “defaults are extremely rare. historically, the asset class has proven resilient to broader market fluctuations”, he says. municipal bond issuers are often public entities with a genuine monopoly, offering essential services with inelastic demand, which enables them to meet their obligations to bondholders consistently. «given the rising deficit in the u.s. federal budget, the government is likely to issue more treasury bonds, which may not be good news for the u.s. treasury market in the long run. by choosing u.s. municipal bonds, investors opt for an asset class that offers significantly better credit ratings, comparable returns, and lower default risk than many investment-grade corporate bonds», he emphasizes.