transforms industries

Municipal bonds finance the
projects that will drive economic
growth in the 2020s


Municipal finance is the original funding mechanism for infrastructure in the US. While not the only source, muni bonds have played a critical role supporting the big projects — such as roads, bridges and transportation — that comprise the ‘backbone’ of the economy.

And today, the anticipated investment in infrastructure may have a transformative effect across industries due to the expected size and scale of that funding. This is why we think infrastructure may be one of the new engines of growth for the rest of the 2020s. This dynamic, along with a strong housing market, possible tax increases, and an infrastructure spending bill bouncing around the halls of Congress, all combine to create a favorable environment for investing in munis.

At BNY Mellon Investment Management, our experienced team of fixed income specialists understand how to spot these long-term trends and harness them within a municipal bond portfolio as engines of growth.

Why choose municipal bonds?

With multiple advantages, munis can be an essential asset to have in the mix.

Diversification. Because they have historically exhibited a low correlation to both the stock market and taxable core bonds, munis may improve overall portfolio outcomes.

Taxes. Most municipal bonds are exempt from federal taxes, and some are tax exempt at the state and local level.

Stability. Munis provide a potentially high degree of stability, with historically low default rates.

Municipal bonds take center stage

Many performance indicators suggest that conditions could be ideal for municipal bonds in 2021 and beyond. Historically, as tax rates rise so does demand for munis. Potential increases in personal and corporate taxes proposed by the Biden administration might drive further interest in munis. In addition, the confirmed $1 trillion fiscal stimulus, with $650 billion earmarked for municipal aide, is likely to be beneficial to municipal bond holders.

Recent returns also promote optimism for municipal bonds, with the asset class demonstrating positive absolute and relative performance. For the most recent 3-year period, high yield municipal bonds have produced comparable total returns and volatility as high yield corporates. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. Past performance is not indicative of future results.

Sources: BNY Mellon Investment Management and Morningstar Direct, as of June 30, 2021. For illustrative purposes only.

The Bloomberg Barclays US Corporate High Yield Bond Index measures the USD-denominated, high yield, fixed-rate corporate bond market.

An investor cannot invest directly in any index.


Strategy highlight: BNY Mellon High Yield Municipal Bond Fund

We believe, a disciplined active management approach will be key to winning in this category. Our team takes a measured stance that aims for investors to be rewarded for taking incremental risk.

This fund is designed to be agile enough to respond to new opportunities and is built on a bond-by-bond method, where each asset is carefully vetted. The team looks for high-yield bonds that are exempt from federal income tax. The fund is large enough to have a meaningful presence in the market, yet nimble enough to take advantage of opportunities that might not be available to larger competitors.

Our suite of municipal bond funds

BNY Mellon High
Yield Municipal
Bond Fund

Morningstar Overall Rating

as of 6/30/2021


The primary goal of the fund is to seek high current income exempt from federal income tax.

BNY Mellon
Opportunistic Municipal
Securities Fund

Morningstar Overall Rating

as of 6/30/2021


The primary goal of the fund is to seek high current income exempt from federal income tax. In pursuit of that goal, it invests 30% of the portfolio in Municipal names rated below investment grade.

BNY Mellon AMT
Free Municipal
Bond Fund

Morningstar Overall Rating

as of 6/30/2021


This fund seeks to be a Municipal core bond offering within a portfolio, pursuing as high a level of current income exempt from federal income tax as is consistent with the preservation of capital.

Interested in one of our funds?

Meet the team


Portfolio Manager, Senior Analyst for Tax-Sensitive Strategies, Mellon Investments Corporation



Senior Portfolio Manager, Mellon Investments Corporation



Portfolio Manager, Mellon



Portfolio Manager, Mellon
Investments Corporation



Why Its Not All About Tax


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Municipals: Setting the Stage in 2021


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What’s driving munis in 2021?


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Muni demand and the
year ahead


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Climate risk still relevant
for muni bonds


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About BNY Mellon Investment Management

BNY Mellon Investment Management is one of the world’s leading investment management organizations, encompassing BNY Mellon’s affiliated investment management firms and global distribution companies. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may also be used as a generic term to reference the corporation as a whole or its various subsidiaries generally.

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Our commitment to fully servicing the need of our investment partners is our highest priority.

Investors should consider the investment objectives, risks, charges, and expenses of a mutual fund carefully before investing. Download a prospectus, or summary prospectus, if available, that contains this and other information about the fund, and read it carefully before investing.

Bonds are subject to interest rate, credit, liquidity, call and market risks, to varying degrees. Generally, all other factors being equal, bond prices are inversely related to interest-rate changes and rate increases can cause price declines. High yield bonds involve increased credit and liquidity risk than higher rated bonds and are considered speculative in terms of the issuer’s ability to pay interest and repay principal on a timely basis.

The amount of public information available about municipal securities is generally less than that for corporate equities or bonds. Legislative changes, state and local economic and business developments, may adversely affect the yield and/or value of municipal securities. Other factors include the general conditions of the municipal securities market, the size of the particular offering, maturity of the obligation, and the rating of the issue. Income for national municipal funds may be subject to state and local taxes. Income may be subject to state and local taxes for out-of-state residents. Some income may be subject to the federal alternative minimum tax for certain investors. Capital gains, if any, are taxable.

Recent market risks include pandemic risks related to COVID-19. The effects of COVID-19 have contributed to increased volatility in global markets and will likely affect certain countries, companies, industries and market sectors more dramatically than others. To the extent the funds may overweight its investments in certain countries, companies, industries or market sectors, such positions will increase a client’s exposure to risk of loss from adverse developments affecting those countries, companies, industries or sectors.

The Morningstar RatingTM for funds, or "star rating", is calculated for managed products with at least a 3-year history. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance (not including the effects of sales charges, loads and redemption fees if applicable), placing more emphasis on downward variations and rewarding consistent performance. Managed products; including open-end mutual funds, closed-end funds and exchange-traded funds; are considered a single population for comparative purposes. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year (if applicable) Morningstar Rating metrics. ©2017 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. The fund represents a single portfolio with multiple share classes that have different expense structures. Other share classes may have achieved different results.

Ratings do not reduce investment risk and are subject to change.

This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product and should not serve as a primary basis for investment decisions. Please consult a legal, tax or investment professional in order to determine whether an investment product or service is appropriate for a particular situation.

BNY Mellon Investment Management is one of the world’s leading investment management organizations, encompassing BNY Mellon’s affiliated investment management firms and global distribution companies. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may also be used as a generic term to reference the corporation as a whole or its various subsidiaries generally.

Mellon Investments Corporation (Mellon) is a global multi-specialist investment manager dedicated to serving clients with a full spectrum of research-driven solutions using both active and passive strategies. Mellon is a registered investment adviser and a subsidiary of The Bank of New York Mellon Corporation.

BNY Mellon Investment Management has announced its intention to realign several of its investment firms. As a result of this realignment, which is scheduled to occur, subject to regulatory requirements, on or about September 1, 2021 ("Effective Date"), the portfolio managers responsible for managing the fund's investments as employees of Mellon Investments Corporation ("Mellon"), the fund's sub-adviser, will become employees of Insight North America, LLC ("Insight"), which, like Mellon, is an affiliate of BNY Mellon Investment Adviser, Inc. ("BNYM Investment Adviser"), the fund's investment adviser, and will no longer be employees of Mellon. Consequently, as of the Effective Date and subject to the approval of the fund's board, BNYM Investment Adviser will engage Insight to serve as the fund's sub-adviser, replacing Mellon. It is currently anticipated that the fund's portfolio managers who are responsible for the day-to-day management of the fund's investments will continue to manage the fund's investments as of the Effective Date, and its anticipated that there will be no material changes to the fund's investment objective, strategies or policies. For more information please see the fund's prospectus or visit

No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission.

BNY Mellon Investment Adviser, Inc. and BNY Mellon Securities Corporation, (distributor) are companies of BNY Mellon.