Fixed income investments can be a core component of a diversified portfolio. However, some investors are concerned about the current low-interest-rate environment.
Municipal bond funds can be a bright spot in this time of low fixed income yields. Furthermore, munis can have a place in a diversified portfolio in many financial climates. Here are three reasons why it may make sense to take a look at municipal bond funds.
1. Unique Attributes Make Muni Bond Funds Stand Apart
A unique attribute is that muni bond funds offer a source of income potential, free from federal and sometimes state and local income taxes. This is important because they enable investors to pursue higher current income on an after-tax basis without being exposed to the risks of higher yielding, non-investment-grade bonds.
- Generally, municipal bonds have lower default risk1 and lower volatility2 compared to taxable bonds of comparative credit and maturity.
- Interestingly, muni bonds have delivered levels of income on an after-tax basis that are comparable to corporate fixed income alternatives of similar quality and maturity.3
2. A Time-Tested Way to Harness Muni Bond Opportunities
Dreyfus Municipal Bond Fund seeks to maximize current income exempt from federal income tax to the extent consistent with the preservation of capital. The fund pursues this goal in a compelling way:
- 75% of fund assets are invested in municipal bonds rated A or better or the unrated equivalent as determined by the portfolio managers.
- In actively managing the fund, the portfolio team members apply their deep experience and utilize extensive research and analytical tools in navigating the large and diverse muni market.
3. A Tax-Exempt Investing Leader Can Make a Difference
Dreyfus offers an extensive selection of municipal bond funds managed by Standish, a well-established firm dedicated to serving sophisticated fixed income investors. As a result, you can access investment strategies spanning a wide range of fixed income disciplines and may benefit from their commitment to designing solutions to satisfy clients’ needs.
The Standish team is respected for adhering to a solid approach in identifying and pursuing fixed income opportunities:
- In collaborating with a dedicated trading desk, the portfolio management team strives to capture dynamic opportunities in a complex marketplace.
Working with us, you can access Standish investment strategies that span the depth and breadth of fixed income disciplines. We look forward to sharing insights on Dreyfus Municipal Bond Fund with you.
For additional information, please call a Dreyfus Representative at 1-800-443-9794.