Does a rising 10-year Treasury yield mean we should move on from municipal (muni) bonds? We’ll talk muni strategy in a moment. First, let’s pay homage to these tax-efficient payers.
Munis are superior to Treasuries two ways. First, they pay more. Even with the 10-year rate popping above 1.6% earlier this week, we can double or triple our dividends with munis. The iShares National Muni Bond ETF (MUB), for example, yields 2.1%, which is 30%+ better than the still-chintzy T-Bill.
Plus, munis have tax benefits. MUB is an easy-to-buy vehicle with a tax-advantaged payout that is higher than its stated 2.1% yield.… Read more