Morningstar, Inc. Commentaries
Jul 11, 2014
Click here to access Comeback Kids: Municipal Funds Made a Strong Showing This Year
Not generally known as an exciting asset class, municipal funds are what investors typically turn to for tax-advantaged income. But the municipal market made headlines last year with Detroit’s bankruptcy and Puerto Rico’s perilous financial situation. Those events, combined with the bond market’s so-called "taper tantrum," caused many investors to flee municipal open-end funds in droves. The open-end category experienced 10 consecutive months of outflows between March 2013 and December 2013. Although pension deficits in cities and states across the country and the potential for rising bond yields remain a concern for investors, tax-advantaged income lured some back to the asset class in 2014.