Net Gains Matter To Muni ETF Investors
PowerShares Insured New York Muni(PZT) , 3.9%, 5.8%
iShares California Muni(CMF) , 3.8%, 5.7%
SPDR Barclays Muni(TFI) , 2.6%, 3.9%
SPDR S&P 500(SPY) , 4.4%, 4.4%
What is particularly impressive about the results are the taxable-equivalent yields. With far less traditional risk than the U.S. stock market, PowerShares National Muni produced a 7.3% taxable equivalent yield for the 33% tax bracket over the last six months.
If one engaged in slightly more risk by investing in a collection of long-dated muni maturities via Market Vectors Long Muni, an investor has seen an 8.1% taxable equivalent yield for the 33% tax bracket over the last six months. Both PZA and MLN compare quite favorably compared to SPY's 4.4%.
In essence, the net gains for muni ETFs are remarkably potent. As long as the masses continue piling into bond funds of all stripes, pushing down bond yields, you might expect the segment to remain attractive. If PZA or MLN dropped significantly below a 200-day moving average, however, one might move to minimize exposure.
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