TITLE

Taxables' Appeal Closing in on Munis, Thanks to Fed Moves

AUTHOR(S)
Fine, Jacob
PUB. DATE
January 2005
SOURCE
Bond Buyer;1/14/2005, Vol. 351 Issue 32050, p6
SOURCE TYPE
Trade Publication
DOC. TYPE
Article
ABSTRACT
The article reports that tax-free money market funds may begin losing their edge over taxable funds as the U.S. Federal Reserve Board continues raising its target for the federal funds rate in 2005. but that shouldn't slow their growth, according to market observers. Because many investors do not have to pay federal and in some cases state-taxes on the income they earn in municipal funds, such funds have typically offered lower absolute yields. As short-term interest rates have hovered at historically low levels in recent years, the difference between the absolute yields offered by taxable and tax-free funds has shrunk, causing the latter to become enormously popular, especially among institutional investors.
ACCESSION #
15684261

 

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