If you don’t like paying taxes, like most of us, you may have noticed that municipal bond closed-end funds are still trading at historically large (and very unusual—attractive!) discounts to NAV. The “magic” of a municipal bond, is that you generally don’t have to pay federal income tax on the income—so if you’re in a high tax bracket—munis can be quite lucrative (especially on a “tax-equivalent” yield basis). In this report, we share data on over 75 big-yield municipal bond CEFs, discuss the current historical opportunity (including how funds are actively working to reduce the discounts!), and then share a few thoughts on particular muni-bond CEFs that you may want to consider for investment.
These 4 Muni-Bond CEFs: Powerful Non-Taxable Income, Low Risk
Municipal Bonds can be an attractive, yet often overlooked, way to generate healthy income with low risk. In particular, and depending on your tax bracket, muni bond’s tax-exempt status can boost your after tax income significantly. In this report, we analyze four Municipal Bond CEFs (closed-end funds) based on portfolio characteristics, return/risk, yield prospects and finally conclude with our thoughts on the pros and cons of each. We currently own two of the four in our Alternative Fixed Income Portfolio.