Most “high bracket” investors love the idea of tax-free muni bonds. But they aren’t sure where to buy them, and often end up using exchange traded funds (ETFs) as their vehicle of choice.
Muni ETFs provide a smooth but unfulfilling ride. The popular iShares National Muni Bond ETF (MUB) for example has rewarded its investors with a drama-free decade. Prescient investors who foresaw the big crash of 2008 and piled into munis saved themselves a year of heartburn and earned $50,000 in Federal tax-free income on every $100,000 they saved from stocks:
MUB is Steady, But Unspectacular
Stocks, as usual, were better over the long run.…