Wells Fargo Advantage Funds Portfolio Manager Lyle Fitterer says he sees muted returns in the municipal bonds that are lagging other markets, expecting a rise in rates before the end of the year.

SHOWS: NEW YORK, USA (JANUARY 28, 2015) (REUTERS - ACCESS ALL)

1. WELLS FARGO ADVANTAGE FUNDS, MUNI BOND PORTFOLIO MANAGER, LYLE FITTERER , SAYING:

JOURNALIST ASKING LYLE FITTERER: 'So we are about a month into 2015, how do you think the municipal bond market is shaping up for investors this year? What are your expectations in terms of returns?'

FITTERER: 'I think first things returns tend to be a lot more muted this year than they were last year. Coming into 2014 it had some significant underperformance in the muni market that turned around last year and ended up being one of the best places to invest your money. I think rates are a lot lower coming into the year, we started out 2014 at around a 3 percent on the ten year. I think right now we are around 175 so just in terms of absolute returns I think much more muted. Longer term portfolios, if you get 2 to 3 percent that might actually be a good number for the year but that is tax exempt. That doesn't look bad I think that our expectation would be that rates end the year a little bit higher than where they are right now. But there are a lot of people saying that rates could go a lot lower. I think in that type of environment obviously returns would be much better. But so far muni returns have lagged other markets on a year to date basis as we have seen a little bit of a pick-up in supply.