Municipal bonds have long been a favorite spot for investors looking to score tax-free income. Issued by states and local governments to fund their daily activities or special projects, munis are generally free from federal taxes. They’re also free from state taxes from the issuing state. As a result, upper income individuals have prized muni bonds as a portfolio position.
But there’s more to the muni market than just general revenue obligation bonds.
In fact, there’s a whole sector of taxable municipal bonds out there. The best part is that these taxable munis could offer a host of benefits to investors looking to boost their income and get a dose of safety for their portfolios. And in many cases, taxable munis could be a better buy than corporate bonds with similar durations. For investors, taxable munis are one fixed income sector to keep on your list.
dividend.com
by Aaron Levitt
May 06, 2021