For 2015, Janney Montgomery Scott overweights muni bonds and believes high-yield corporate debt are “also reasonably attractive,” reports Michael Aneiro for Barron’s.
“Municipal-bond yields are generally lower than those sported by their taxable counterparts because of their tax benefits,” according to Morningstar analyst Thomas Boccellari.
The muni funds can be used as a core fixed-income allocation to help alleviate some tax costs.
Additionally, Janney projects that muni-to-Treasury yields to trend lower next year – a falling ratio reflect an outperforming munis market, due to improved confidence in municipal creditworthiness and default fears abate.
“Once again, tax-exempts represent our strongest conviction overweight call for 2015, an outgrowth of the value of tax-exempt income at a time when upper bracket tax rates are at their highest levels since 1986,” Janney Montgomery Scott said in the article.
Janney expects credit fundamentals to remain sold through 2015.
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The D2 Capital Management Tax Free Income Portfolio is currently yielding 4.37% (Trailing 12 month Tax Equivalent Yield at 28% Tax Bracket, as of 2 December 2014). Year to date the portfolio is up 8.93%
The views expressed here are that of myself or the cited individual or firm and do not constitute a recommendation, solicitation, or offer by myself, D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.
The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville. The Firm is also a member of the Financial Planning Association of Northeast Florida, the Jacksonville Chamber of Commerce, the Southside Businessmen's Club, and the Beaches Business Association.
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