Quoted from Barron’s:
There has been a sea of red in municipal bonds, down 11.6% this year, on average. Investors have fled. Muni funds had net outflows of $77.6 billion through August this year, compared with a net inflow of $85.6 billion over the same period a year earlier, according to Morningstar. “The selloff has been historic,” says Brian Pytlewski, director of municipal fixed income at Genter Capital Management.
This could be a good time to dip back in. Some AAA-rated five-year munis yield 3%, versus 0.60% at the start of 2022, notes Pytlewski. For an investor in the top federal tax bracket of 37%, with a 6% state income tax, that’s equivalent to a 5.26% after-tax yield.