Municipal Bonds: A Unique Fixed Income Asset Class
Typically like other bond investments, municipal bonds (munis), which are issued by state and local governments, offer investors regular interest payments and return of the principal at maturity. But munis are unique in that their interest payments are generally exempt from federal income taxes, and in some cases state and local income taxes as well. Munis may also offer high credit quality, low volatility relative to some other asset classes and potentially greater after-tax returns (for investors in higher tax brackets) than other fixed income securities of comparable maturities and credit ratings.
Past performance is not a guarantee or a reliable indicator of future results. Investing in the bond market is subject to certain risks including market, interest-rate, issuer, credit, and inflation risk. Income from municipal bonds may be subject to state and local taxes and at times the alternative minimum tax; a strategy concentrating in a single or limited number of states is subject to greater risk of adverse economic conditions and regulatory changes.
This material contains the opinions of manager and such opinions are subject to change without notice. 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. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. ©2012, PIMCO.
No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. Pacific Investment Management Company LLC, 840 Newport Center Drive, Newport Beach, CA 92660, 800-387-4626. ©2013, PIMCO.
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