Municipal bonds have long been prized by investors with higher incomes and higher tax brackets thanks to the fact that they can offer tax-free income. The vast bulk of the muni sector is free from Federal taxes and, depending on where the bond is issued, state taxes as well. As such, munis form a major building block of many high-net-worth (HNW) portfolios.
And investors in this category may have an opportunity at the long-end of the spectrum.
With their current high yields and potential for tax changes on the horizon, long-dated bonds may offer HNW individuals and families a wonderful win, especially when compared to Treasuries. Adding a dose of them makes perfect sense today.
Long Bonds Take a Hit
When it comes to fixed income, the middle or intermediate bonds are often considered the sweet spot offering the perfect blend of duration risk and current yield. However, for high-net-worth families looking at the muni space, they may want to consider the long end of the spectrum.
dividend.com
by Aaron Levitt
Jun 07, 2023