Municipal Bond Forum
Municipal bond funds vs. individual municipal bonds
Q
I read your article, “More Muni Investors Selecting Their Own Bonds,” and would like to learn more about getting out of municipal bond funds and buying individual municipal bonds. My main concern is that if I sell the munis, their price has been hammered due to low interest rates, so I am in essence selling low and buying high. That said, I still would like to have a conversation as I could put my dividends and interest payments into individual bonds.
A
James A. Klotz responds:
We think you might misunderstand how the mutual funds and individual bonds are priced in today’s market.
Municipal bond funds are, as you say, recently depressed in value, but these funds contain primarily municipal bonds.
Accordingly, the fund prices are lower but so are the individual bond prices.
In other words, you will be buying in the same lower-priced market in which you are selling.
Please call us at 800-FMS-BOND (367-2663) and one of our muni bond specialists would be glad to walk you through some of the options available in your situation
Start here.
Do you have specific criteria for bonds you’re looking for? Let us know and we’ll e-mail you bonds that fit your needs. There is no charge for this service.
The responses provided in this forum are meant to address specific questions posed by investors about their municipal bonds and to provide market insight for our general audience. Please note, your investments, objectives, results and experience may differ significantly. Our answers and any potential strategies discussed should not be construed as a solicitation to buy nor sell any security or investment product. All investing entails risk.