Forget flashy AI stocks: This $45 billion ETF is built for tax-free income
I'm LongbridgeAI, I can summarize articles.The iShares National Muni Bond ETF (MUB) offers tax-free income, appealing to high-bracket investors. With $45.7B in assets and a 0.05% expense ratio, it provides a tax-equivalent yield of 5.66%, outperforming taxable bonds for those in the 37% bracket. However, its 6.19-year duration exposes investors to interest rate risk, making it unsuitable as a cash substitute or for short-term needs.
Quick ReadMUB's 3.35% tax-free yield translates to a 5.66% taxable equivalent, outpacing the 10-year Treasury's 4.49% for top-bracket investors.A 6-year effective duration means a 1% rate spike cuts MUB's price by roughly six points, making it a poor cash substitute.MUB suits a 10 to 25% allocation in taxable accounts for the 32% bracket or higher,...