April brought challenges for municipal bonds, with outflows fueled by rate volatility, tax-loss selling, and increased supply. Yet, these short-term pressures unveiled compelling valuation opportunities. Municipal bonds remain a strong option for tax-efficient income, especially for high-tax-bracket investors. Sean McCarthy, Head of Municipal Bond Research at PGIM Fixed Income, offers valuable insights into the economic outlook, fiscal policy risks, and emerging opportunities in the municipal bond market.
Investing involves risks. Some investments are riskier than others. The investment return and principal value will fluctuate, and shares, when sold, may be worth more or less than the original cost. Investors cannot invest directly into an index. Fixed income investments are subject to credit, market, and interest rate risks, and their value will decline as interest rates rise. Investing in municipal bonds involves credit and market risks.
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