"Municipal bonds have made their opening move. After months of being labeled "cheap," the tax-exempt market responded with a rally across the full curve. Yields dropped, ratios tightened, and early investors saw results. But if you missed the first wave, don't worry. There's still opportunity ahead, especially for those focused on what's next. Munis may not grab headlines, but their quiet consistency and tax advantages could make them a smart choice for investors seeking stability and income, especially in today's market."
"This isn't a "get out" moment. It's a "stay and enjoy the yield" one. For many investors, it's a chance to rethink how munis fit into your portfolio and capitalize on the value that remains. Going long still makes sense Even after the rally, the municipal bond curve remains historically steep. Investors can still earn significantly more income by moving into longer maturities, especially in high-quality bonds."
"The difference between 10- and 30-year yields is near its highest in over a decade, signaling that long-term munis continue to offer outsized value. For those cautious about duration, intermediate exposures balance interest rate sensitivity with attractive yields beyond 10 years. But the most compelling opportunities are in strategies that span the full range of maturities or focus on the long end of the curve, where value is strongest."
Municipal bonds rallied across the full curve, causing yields to fall and ratios to tighten while creating early investor gains. The municipal curve remains historically steep, leaving notable income opportunities in longer maturities and high-quality bonds. Intermediate exposures provide a balance between duration risk and yield, while full-spectrum or long-end strategies capture the most compelling value. In high-tax states, tax-equivalent yields on long-term munis can rival taxable equities on a risk-adjusted basis. Breakeven tax calculations including federal, Medicare, and state taxes often favor munis for investors in higher tax brackets.
Read at Fortune
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