2020_06_20 — “The Missing 1% in Munis -5, 4, 3, 2, 0”

SYNOPSIS: Municipal bonds (munis) tend to have high coupons because people like the perception of income or current yield, but in a low interest rate world, a high current yield is mostly just return of principal. Thus, zero coupon bonds are attractive because they do not have reinvestment risk and their total return is often higher than similar coupon paying munis. Yield to repayment (YTR) is not a professional bond term, but could be used to encapsulate the yield achieved by an investor over their holding period.

The Missing 1% in Munis -5, 4, 3, 2, 0

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