BANKING AND CREDIT NEWS-September 3, 2019-BNY Mellon declares distributions on closed-end municipal bond funds
M2 EQUITYBITES-September 3, 2019-BNY Mellon declares distributions on closed-end municipal bond funds
Global Banking News-September 3, 2019-BNY Mellon declares distributions on closed-end municipal bond funds
However, tax-exempt interest from municipal bonds is not subject to the additional tax, so conservative investors looking to maximize after-tax return should consider increasing exposure to municipal bonds or municipal bond funds
. On top of the favorable tax treatment, municipal bonds currently offer a tremendous amount of value when compared to other fixed income options.
They attracted more than $178 billion in inflows -- led by intermediate term and ultra short bond funds -- while actively managed municipal bond funds
had inflows of $28 billion.
The announcement means certain bondholders, including hedge funds and municipal bond funds
, could see significant cuts to their expected returns, opening the way for a fight in the courts over the definition of essential services the government wants to fund by clawing back repayment and interest owed to lenders.
Some municipal bond funds
have low expenses and strong track records.
Municipal bond funds
captured another $1.3 billion of inflows.
According to Oppenheimer, the ruling represents good news for investors in municipal bonds and municipal bond funds
. The act would have allowed the island's electric authority, highway authority and aqueduct and sewer authority to restructure their debt, the company said in a statement.
The complaints allege that UBS provided unsuitable recommendations to investors and recommended concentrated investments in Puerto Rico leveraged municipal bond funds
with high risk holdings.
Since the start of 2009, funds invested in junk bonds have returned an average 14 percent each year and municipal bond funds
6 percent, according to the Investment Company Institute, double their averages in the prior six years.