This tax-free income play is set up for a strong year-end performance, says UBS

The combination of higher yields and the expected cooling supply post-election should help municipal bonds' strong performance later this year, per UBS.

Municipal bonds not only offer solid, tax-free income — they should also see some capital appreciation later this year, according to UBS. Yields in AAA muni bonds have recently ticked higher, primarily because of the strong supply coming into the market ahead of the election , senior fixed income strategist Sudip Mukherjee said in a note last week. Bond yields move inversely to prices. That means as yields rise, prices decline.

"However, looking beyond the election, we believe the setup is constructive for strong year-end performance, given the combination of higher yields and our expectation of supply cooling following the election," the strategist added. Meanwhile, the economy is on track for sustained growth at a solid pace, the strategist noted.

We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

CNBC /  🏆 12. in US

Municipal Debt Municipal Bonds Bonds Stock Markets Investment Strategy Vanguard Tax-Exempt Bond Index Fund Schwab Municipal Bond ETF Business News

United States Latest News, United States Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

China stocks to remain volatile amid fiscal stimulus speculation- UBSChina stocks to remain volatile amid fiscal stimulus speculation- UBS
Read more »

S&P 500 will hit 6200 by June 2025: UBSS&P 500 will hit 6200 by June 2025: UBS
Read more »

UBS lifts its 2025 S&P 500 price target by 8%UBS lifts its 2025 S&P 500 price target by 8%
Read more »

UBS sees S&P 500 soaring to 6,400 by the end of 2025UBS sees the U.S. stock market scaling to new heights in the new year.
Read more »

UBS says these are its top 20 ideas for OctoberUBS says these are its top 20 ideas for October
Read more »

Harris' Lead Fades, But Victory Still Likely: UBSDemocratic presidential candidate Kamala Harris' lead over Donald Trump is narrowing as the election approaches, according to UBS, though a Harris victory and divided Congress remains the most likely outcome.
Read more »