Muni bond market set for worst year in almost two decades.

Municipal debt is down 2.58% so far this year, putting the asset class on course for its worst annual performance since 1994. In contrast, muni debt provided a return of 6.78% last year. Detroit's fall into bankruptcy protection, as well as problems in Chicago, Illinois and Puerto Rico, have had a major effect. However, municipal debt tied to real-estate development, which is known as "dirt bonds" and is fairly risky, has risen 1.1% amid the recovery in the housing sector.