Investors are shrugging off lagging default concerns and coming back to municipal bonds in...

|By:, SA News Editor

Investors are shrugging off lagging default concerns and coming back to municipal bonds in increasing numbers, largely due to uncertainty over tax policy, observes U.S. Bank's Dan Heckman. “They look at munis as another safe haven outside of Treasurys, and you pick up additional yield and a tax advantage.” The heightened interest is not all too surprising, as muni-bonds of all maturities have returned almost 9% in the last year. The average effective yield is 2.48%, which isn’t too shabby when you consider that the higher risk corporate bonds are only yielding around 2.86%.