Rising interest rates have made municipal bonds increasingly attractive to high-income investors, especially those in states like California and New York, due to their tax-free payouts. These bonds, typically offering lower yields than corporate bonds, now present a more appealing after-tax return. Investors can access municipal bonds through individual purchases, mutual funds, or ETFs, with ETFs providing real-time trading and better liquidity. This renewed interest marks a significant shift for municipal bonds, which had languished during the years of near-zero interest rates.
Rising interest rates have renewed interest in municipal bonds, particularly for high-income investors in states like California and New York due to attractive tax-free payouts.
Municipal bonds appeal to investors as they provide after-tax returns from tax exemptions, even though their yields are generally lower than corporate bonds.
Accessing municipal bonds can be done through individual purchases, mutual funds, or ETFs, where ETFs allow for real-time trading and increased liquidity.
With rising interest rates, municipal bonds have become attractive again, especially for investors in states that exempt these bonds from both federal and state taxes.
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