Although the Federal Reserve raised interest rates for the first time in almost decade last month and plenty of pundits believe multiple rate hikes are on the way this year, some investors are finding comfort in municipal bond exchange-traded funds.
The question savvy investors need to be considering right now is whether municipal bonds are inexpensive relative to other fixed income asset classes. That query can be answered by evaluating the tax-free yield to U.S. Treasury yield ratio.
Tax-Free Yield To U.S. Treasury Yield Ratio
“Are U.S. municipal bonds rich or cheap relative to other fixed income asset classes? It is all relative. As of January 15th 2016, the yield to worst of investment grade bonds tracked in the S&P National AMT-Free Municipal Bond Index was a 1.8 percent (tax-free yield). The Taxable Equivalent Yield ...
/www.benzinga.com/trading-ideas/long-ideas/16/01/6153989/finding-value-in-municipal-bond-etfs alt=Finding Value In Municipal Bond ETFs>Full story available on Benzinga.com
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