High yield munis offer tax-exempt income, historically lower default rates than corporate high yield, and distinct sector exposure. Here’s what defines this asset class.
Key Takeaways:
- High yield munis are project-backed, not government-guaranteed. Healthcare, education, and housing drive this market.
- Tax exemption can make after-tax yields highly competitive. High yield munis may exceed corporate high yield on an after-tax basis.
- Unrated does not automatically mean low quality. Many unrated munis skip ratings for cost reasons, not credit weakness.
vaneck.com
April 08, 2026