TAXF ETF

With U.S. elections just under a week from now, many investors may be tuning in with questions about taxes. Overlapping with a time of year when many advisors look to mitigate tax impacts for clients, it may be worth considering ETFs to help.

In a macroeconomic environment subjected to rising yields, muni bonds can offer both yield and the stability of quality debt. Furthermore, both are achievable using one exchange traded fund: the American Century Diversified Municipal Bond ETF (TAXF).

Fixed income investors experienced the pull of rising yields during the first half of 2023, which included attractive options within the municipal bond market. “With the highest yields in years, the muni bond market looks increasingly attractive,” an AllianceBernstein blog post noted.

With the ongoing capital markets discussion on inverted yield curves, the threat of a recession still looms. Fixed income investors need not fret, however, if they consider the right exposure — one option being municipal bonds.

Investors may be looking at tax season in the rearview, but that's no excuse to ignore taxes all year. As discussed in previous coverage of advisors' tax considerations, factors like the “January Effect” require tax attention.