Why Buy Municipal Bonds Review

: Using muni ETFs or separately managed accounts (SMAs) to navigate sector-specific opportunities and risks.

: Bonds bought at a "market discount" may trigger capital gains taxes (de minimis tax), and some bonds may be subject to the Alternative Minimum Tax (AMT). why buy municipal bonds

: Combining short-term and long-term bonds to capture high immediate income while staying flexible for future rate changes. : Using muni ETFs or separately managed accounts

: Analysts see specific value in pre-pay energy bonds and Low-Income Housing Tax Credit (LIHTC) bonds , which can offer yields 200–250 basis points higher than generic high-grade munis with similar default risks. 3. Municipal vs. Corporate Bonds Municipal Bonds Corporate Bonds Tax Treatment Generally tax-free (Federal/State) Fully taxable Credit Risk Historically lower default rates Higher risk of default Yield (Absolute) Typically lower Typically higher Yield (After-Tax) Often higher for top tax brackets Often lower for top tax brackets Volatility Lower volatility Higher volatility 4. Risk Considerations : Analysts see specific value in pre-pay energy