Muni bonds are beloved by wealthy investors because they offer income that's free of federal taxes.
Muni bond ETFs and mutual funds, meanwhile, don't have a definite maturity date and their price can fluctuate while the investor is holding them.
Liquidity needs are also a major factor, with individual bonds potentially being hard to sell if an investor has a cash need.
Since these funds offer a fixed number of shares, they trade at a discount or premium to their net asset value.
Some of these funds hold municipal bonds and are trading at sharp discounts to their net asset value, potentially making them an attractive purchase.
Persons:
Kathleen McNamara, there's, muni, he'll, Beth Foos, James Ritzema, Baird, Jon Browne
Organizations:
Federal Reserve, UBS, tradeoffs Investors, SEC, Investors, Morningstar, RiverNorth
Locations:
Americas, –