While investors in municipal bonds often are “buy and hold” investors — that is, they intend to own bonds as long-term investments to be held to maturity — investors may wish or need to sell their bonds prior to their stated maturity. There are risks and costs associated with selling a municipal bond prior to maturity.
growth. An increase in interest rates will decrease a bond’s price or value. The converse is also true: negative economic news may indicate lower inflation and an expected decrease in interest rates, resulting in an increase in bond prices. Municipal bond investors should be aware of how bond market prices are directly linked to economic ...
FIVE TRUTHS ABOUT MUNICIPAL BONDS - Investments
2 Five Truths about Municipal Bonds franklintempleton.com When interest rates rise, it’s true that bond prices generally fall. However, when interest rates rise, bond investors also have the opportunity to invest in new, higher-yielding bonds. Municipal bond prices are sensitive to interest rate movements and as history
term structure of municipal bonds remains steeper than that of the U.S. Treasuries even after the effect of default risk is controlled. An important factor completely left out by previous municipal bond pricing models is liquidity risk. The municipal market is very illiquid compared to the U.S.
Our municipal bond default study covers tax-exempt long-term bond issuers with credit ratings outstanding at anytime between 1970 and 2000. 4 The database used to conduct this analysis contains 77,746 rating actions for 28,099 separate 4.
The S&P Municipal Bond Index declined -0.65% over the month, putting the year-to-date return at 6.57%. Although the Fed cut its target range in mid-September, interest rates ended the month higher given a backdrop of moderate economic growth, slightly higher inflation and some easing in trade tensions. (Bond prices fall when rates rise ...
corporate and government related bonds; and the Bloomberg Barclays Municipal Bond Index, an unmanaged index of long-term fixed-rate investment-grade tax-exempt bonds, respectively. You cannot invest directly in an index. Bond investments are subject to interest-rate risk (the risk of bond prices falling if interest rates rise) and credit risk
See the real return advantage of municipal bonds. The adverse effects of taxes and inflation can erode the income offered by CDs. Municipal bonds may be an attractive alternative, particularly for higher income earners. CD rates versus muni bond returns
Treasury long-term composite interest rate. This is the longest existing Treasury long-term bond interest rate series, and it is still computed by the Treasury Department.4 For 1921-1925 the bonds included in this series are partially tax exempt, so again their yields may be lower than equivalent bonds today.
Short-Term Tax-Exempt Fund 3 Limited-Term Tax-Exempt Fund 51 Intermediate-Term Tax-Exempt Fund 145 Long-Term Tax-Exempt Fund 285 High-Yield Tax-Exempt Fund 326 Trustees Approve Advisory Arrangements 375 Important information about access to shareholder reports Beginning on January 1, 2021, as permitted by regulations adopted by the
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