This Muni ETF's 4.72% Tax-Free Yield Is Worth 7.49% to a Retiree in the Top Tax Bracket
Most retirees compare bond yields at face value and quietly leave money on the table.
Why Retirees Are Dumping Individual Bonds for This ETF and Collecting 4.37% Tax Free
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High Earners Are Skipping Treasuries for These 3 Tax Free Muni ETFs Yielding Over 4 Percent After Tax
The 10-year Treasury yields 4.43%, which sounds competitive until a high earner runs it through the tax screen.
High Yield Munis Useful for Diversification, Extra Income
When advisors and investors hear the terms “high yield” or “junk” as it relates to bonds, they understandably have some apprehension. After all, junk bonds carry elevated credit risk relative to their investment-grade peers.
HYD: Toward My Preferred Strategy But Not Quite There
VanEck High Yield Muni ETF (HYD) is recommended for investors seeking tax-advantaged income, especially those in higher tax brackets. HYD captures excess yield by allocating to unrated and low-rated municipal bonds, exploiting perceived mispricing of credit risk in the muni market. The fund's strategy partially implements a favored approach—overweighting unrated bonds—yet does not pursue it as aggressively as some peers.
HYD: High Yield Munis Present A Clear Contrarian Play (Rating Upgrade)
HYD offers exposure to high-yield, long-term, tax-exempt U.S. municipal bonds, appealing to income-focused investors seeking tax advantages. The fund aims to track the overall performance of the high-yield muni bond market, providing diversified access to this asset class. Current market pricing and yield levels present a contrarian entry point for investors comfortable with elevated credit risk.
HYD: This High-Yield ETF Is A Strong Buy
VanEck High Yield Muni ETF offers attractive, tax-free income, strong yield, liquidity, and broad diversification, making it compelling for taxable portfolios. HYD's current 4.67% SEC yield translates to a much higher tax-equivalent yield, especially for high earners, with lower default risk than high-yield corporates. Potential Fed rate cuts could boost HYD's price, offering both income and capital gains; the current price is below historical highs, adding upside potential.
Bond ETF HYD Could Be a 2025 Winner
Municipal bonds aren't the most exciting segment of the fixed income market. However, they are increasingly gaining positive calls heading into 2025.
4 High-Yield Dividend ETFs to Buy to Generate Passive Income
These four income-generating ETFs will attract more investors as interest rates decline.
HYD: Munis Have Momentum And Tailwinds To Keep It Going (Rating Upgrade)
Munis often rise in the months following Fed rate cuts, suggesting there is still time to get in on this play. The fund's California exposure bothers me less given how strong equity returns have been. This means personal income tax revenues in the state will rise next year. High yield munis default less than comparable corporates, supporting positions in this fund.
HYD: Great Tax Equivalent Yield
VanEck High Yield Muni ETF offers high-yield, tax-free income by focusing on municipal bonds, making it attractive for investors in higher tax brackets. The HYD ETF's diversified portfolio includes 1,475 holdings and a 30-day SEC yield of 4.2%, with a taxable equivalent yield of 6.73% for top tax brackets. The fund's broad sector and geographic allocation, with a significant portion in California, adds stability but also focuses risk on specific states.
Some Green Shoots for Muni Bonds
With the help of a brief flight-to-safety trade and hopes that the Federal Reserve will soon cut interest rates, perhaps by more than expected, bonds have gotten a lift. And muni bonds are participating in that upside.
