Municipal bonds: A solid option for capturing yield at reasonable risk

Watch as we illustrate how municipal bonds provide access to tax advantages, a history of consistently high credit quality, and an increasingly positive outlook.

×
municipal bonds have experience in corporate debt across the entire credit rating Spectrum this persistent level of credit quality becomes particularly important in the midden bethman grade segment where Delaware Investments typically has an overweight allocation versus competitors reaching back more than 40 years we find a boat rates that are minuscule when compared to corporate issues consider the time span between 1970 and 2012 as shown here the numbers make a strong case for the stability of Municipal Credit when compared to corporate issues with municipal bonds and outright default rarely means that investors be so total loss of their principal and interest payment interest payments may be delayed but total implosions are rare consider the during the Great Depression which was the worst. For municipal default in US history the recovery rate was 99.5% why focus on credit quality because after a period of negative headlines within Municipal markets state and local finances are not in Dire Straits in fact about finances are improving and this Improvement gets to the heart of the matter according to the National League of cities Finance managers at municipalities so improved Financial results in 2013 / 2012 72% of them reported that they were quote better able to meet their needs in 2013 this is the biggest yearly jump since 2000 for some investors particularly those in the highest tax bracket tax code changes that went into effect in 2013 have made municipal bonds and even more attractive investment alter this is because the tax-free feature of municipal bonds becomes more compelling as taxation rates go higher for example the taxable-equivalent yield for a hypothetical investor in the highest federal tax bracket 39.6% plus a 3.8% on earned income Medicare tax cut under the health care and Reconciliation Act of 2010 clamps to 6.5% on a Muni Bond yielding 3.68% percent yield premium over the bond stated yield and approximately 2.75 percentage points more than an equivalent 30 year treasury bond a professional Municipal Bond specialist location on your behalf

Recent Fixed Income Videos

2:48

Info

Negative interest rates: Staying power for the ...

Jun-10-2016
1:55

Info

Delaware Investments Fixed Income team: A look ...

May-24-2016
1:46

Info

Delaware Investments Fixed Income team: A look ...

May-24-2016
2:03

Info

Delaware Investments Fixed Income team: A look ...

May-24-2016
1:38

Info

Delaware Investments Fixed Income team: A look ...

May-24-2016
2:24

Info

The Great Risk Rebalance: Facing the debt super...

May-19-2016
2:14

Info

Risk managed solutions

Apr-12-2016
1:50

Info

A positive outlook for credit conditions

Jun-09-2015