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Muni Bonds - ETFs vs. Closed End Funds



December 20, 2010 – Comments (5)

Muni Bond ETFs? Not So Fast compares a few popular municipal bond ETFs to some closed-end fund alternatives.

With the Fed on record as trying to increase inflation with QE2, I'm not a big fan of municipal or nearly any other type of fixed coupon bond.  Add in uncertain credit quality for many issuers and munis get even less attractive.

Investors who do want exposure would be capital-F Foolish to investigate closed-end funds.  Experienced management and, in some cases, higher yields make the closed-ends look attractive compared to ETFs.

Feel free to weigh in with your opinion with a comment here or on the article

Fool on!


5 Comments – Post Your Own

#1) On December 20, 2010 at 9:25 PM, HarryCaraysGhost (87.35) wrote:

All I can say is-


I just think that I should take on more risk while in my thirties.

When I hit the big 50 I'll start looking at bonds.

Just wanted to rec and throw in my dime.

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#3) On December 20, 2010 at 10:18 PM, rd80 (95.18) wrote:



I crossed the big 50 a couple of years ago and don't plan on buying any bonds or bond funds for the foreseeable future.  I'd much rather put new money into dividend paying stocks.  About the same yield as bonds and, if I choose wisely, I get a raise every year.

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#4) On December 20, 2010 at 11:01 PM, HarryCaraysGhost (87.35) wrote:


Good point,

Whenever I've went through the exercise of putting a paper retirement port together.

I always include ten percent bonds (just seemed like the thing to do)

But your right, if I add to the divis I could get the same results or better.



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#5) On December 20, 2010 at 11:32 PM, rd80 (95.18) wrote:

I do have some bond funds, but am underweight bonds compared to the classic '100 or 110 minus your age = stock weight' rule of thumb.  Just not adding or planning to add anything other than fund distribution reinvestments to fixed income anytime soon.

Should have been clearer.

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