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A married couple filing jointly with $400,000 of taxable income occupies one of the highest tax brackets many affluent retirees and professionals will encounter before reaching the top tier. At that income level, federal taxes already take a meaningful bite out of interest income, and investors in high-tax states can face an even steeper combined burden.... This $750,000 Municipal Bond Sleeve Pays a High-Earner Couple $33,000 a Year of Federal-Tax-Free Income
The traditional approach to fixed income is undergoing a sophisticated evolution. While core aggregate benchmarks remain the bedrock of many fixed income portfolios, advisors are increasingly looking to complement these holdings with specialized income alternatives.
The One Big Beautiful Bill Act (OBBBA) contains a plethora of tax alterations that advisors and clients should be aware of. The tax advantages offered by municipal bonds remain in place.
PIMCO is broadening its ETF lineup. It has launched a new strategy that blends passive equity exposure with active fixed income management.
MUNI offers diversified, tax-free income via intermediate municipal bonds, with modest interest rate risk and high liquidity. The fund is well-managed and low-cost, but yields are only compelling for top tax bracket investors or the highly risk-averse. Tax advantages make MUNI attractive mainly to those with high marginal tax rates; for most, similar after-tax yields are available elsewhere.
Actively managed fixed income ETFs have been increasingly popular in 2024. Investors have turned to professionals to help navigate the bond market amid shifting monetary and pending fiscal policies.
MUNI is an actively-managed muni bond ETF from PIMCO. Although the fund's dividends are tax-advantaged, its 3.4% dividend yield is too low for a buy rating. Lots of ETFs provide higher after-tax income to effectively all investors, including CARY and JAAA.
Actively managed ETFs continued to gain traction in July with $24 billion of net inflows. This represented 19% of the industry's net inflows, which remains impressive given the 7% share of the assets.