Andrew Clinton, CEO and Founder of Clinton Investment Management (CIM), LLC, met with Keith Black, Managing Director of RIA Channel, to discuss municipal bond investing in an election year.
Clinton believes there is income in fixed income again, with yields on municipal bonds now reaching attractive levels. For investors in the highest tax brackets, the tax-equivalent yield on muni bonds is now over 8%, a return often associated with risky investments.
Despite lower relative default rates, investment-grade muni bonds may offer greater tax-equivalent yield than BB- and CCC-rated corporate bonds.
Andrew believes that the Fed funds interest rate is not likely to move higher from today’s levels, especially after recent data showing slowing inflation rates and GDP growth. He also opined that a second Trump administration is likely to continue the current tax policy, while a second Biden administration could lead to higher tax rates and increased demand for muni bonds.
CIM and MassMutual focus on doing what’s in their clients’ best interest, which begins with pursuing high-risk-adjusted returns. While many muni bond investors buy the highest-rated bonds, CIM performs credit analysis to buy lower-rated investment-grade bonds with a low probability of anticipated default. Muni bonds have much lower default rates than corporate bonds, with AAA and AA-rated muni default rates at 0.02% or less, A-rated at 0.1%, and 1% for Baa-rated bonds.
WEBCAST – Muni Bonds: Tax Efficiency in an Election Year
Get a timely and actionable overview of what is happening with municipal bonds and the markets. Are your clients concerned about tax planning and election outcomes as the year unfolds? What role can municipal bonds play in a tax-efficient portfolio? How active are financial advisors in tax-harvesting Muni bond portfolios?
With challenging supply in the muni market, limited access to inventory, and growing demand, we will discuss the emphasized benefits of active management and the essential role that municipal bonds play in a tax-efficient portfolio.
Tune in to hear the Top 5 timely muni market insights from MassMutual and Clinton Investment Management
- Market and macro backdrop
- How tax policy may be affected by the presidential election
- Utilizing muni bonds to maximize tax efficiency.
- Opportunities within muni credit to maximize tax-free income.
- Benefits to active portfolio management
Accepted for 1 CFP® / IWI / CFA CE Credit