Municipal Bond investors are facing many challenges today from elevated inflation and a Federal Reserve well into a tightening cycle, to significantly negative total returns year to date. Investors may feel inclined to shy away from fixed income during these periods because of the recent drawdowns in total returns. However, there are several reasons why tax-exempt bonds should be part of your client’s portfolios.
In the upcoming webcast, Navigating Today’s Dynamic Market Environment with Active Municipal Bond Fund Management, Joseph Gotelli, vice president and senior portfolio manager at American Century Investments, will discuss the macroeconomic outlook and where he sees opportunities in the municipal bonds market during these unprecedented times.
Investors who are also looking into the municipal bonds market can turn to something like the American Century Diversified Municipal Bond ETF (NYSEArca: TAXF) to capture this fixed income segment. TAXF is an actively managed municipal bond fund that combines investments in thoroughly researched high yield and investment-grade municipal bonds. Designed for investors who are seeking current income, the fund dynamically adjusts investment grade and high yield exposures based on prevailing market conditions.
The municipal bond exchange traded fund seeks consistent tax-free income and dynamically allocates to investment grade and up to 35% high yield to take advantage of prevailing market conditions. It also employs an active, time-tested process designed to identify attractive issues with low default risk, and aligns risk exposures with highest-conviction ideas.
“We believe credit ratings don’t always signify the best investment opportunities. Our research team analyzes several factors driving credit quality. Their insight helps us identify bonds — including non-rated and other out-of-benchmark securities — that we believe have attractive risk/return potential,” according to American Century Investments.
Financial advisors who are interested in learning more about the municipal bond market can register for the Thursday, December 15 webcast here.