Betting on Housing Bonds

摘要

This fund looks for undervalued corners of the muni market. IT'S EASY TO SEE THE APPEAL of municipal bonds for investors in the highest tax brackets. These IOUs, issued by state and local governments, are typically exempt from federal taxes as well as from most state and local taxes for hometown buyers. So investors who hold munis in taxable accounts enjoy higher effective yields than they'd get on comparable taxable debt. And now may be a good time to buy. Although demand for the bonds remains relatively constant from year to year, so far in 2018 muni bond issuance is running 15% below levels for the same period last year. A shortage of new supply boosts the value of existing bonds, and the current supply-and-demand imbalance should continue for now.