Municipal Bonds: Going Long on Duration, High on Income May 14, 2021
Fixed income investors willing to step out farther on the yield curve can achieve higher-yielding benefits with assets like the
The muni debt markets offers attractive tax advantages.
“This fund tracks an index of municipal bonds, a slice of the bond market that is highly coveted due to its tax features,” an ETF Database analysis explained. “These bonds are generally free from federal taxes and in some cases, state and local income taxes as well making these funds crucial components of portfolios for those in high tax brackets.”
Furthermore, municipal bonds are typically used to fund projects that involve infrastructure improvements at the state-wide or city-wide levels. Being that local governments are less likely to default on their debt, the muni debt market is relatively more stable.