Municipal Bonds Gain Traction as Equity Alternatives for 2025

Municipal Bonds are gaining investor attention as a potentially solid investment option for 2025. Strong performance in fixed income may indicate a shift in portfolio strategies.

Date: 15-01-2025

AI Rating: 7

Overview of Municipal Bonds in 2025: The analysis outlines how municipal bonds are increasingly appealing to investors as fixed income securities perform well in the market. The report highlights that, according to Gregory Steier from Brown Brothers Harriman, high-quality municipal portfolios may even outperform equities in 2025.

Market Factors: Elevated yields and record municipal bond issuance contribute to the attractiveness of munis. This environment is characterized by relatively low risks, giving investors more confidence in these opportunities compared to higher volatility equities.

Advantages of Municipal Bonds: Munis are appealing due to their liquidity, income generation potential, diversification benefits, and tax efficiency. Investors are encouraged to consider national municipal bonds for broader advantages over state-specific options.

Accessing Municipal Exposure: The report mentions that investors can tap into municipal bond exposure through ETFs like the ALPS Intermediate Municipal Bond ETF (MNBD), focusing on bonds exempt from federal taxes. Such ETFs have demonstrated strong returns and outperformed their benchmarks, making them an attractive option for investors.

Stocks: MNBD