The Case for Investing in U.S. Municipal Bonds
Municipal bonds have historically appealed mainly to investors subject to U.S. federal and state income taxes. However, investors not subject to these taxes, such as non-U.S. investors, are showing increasing interest in the asset class. Foreign holdings of U.S. state and local debt was $104.6 billion at the end of the fourth quarter of 2017. This is a small but growing portion of the $3.8 trillion U.S. municipal bond market, as a broad range of investors discover the attractive risk and reward potential of municipal bonds.