July 9, 2002 — High-quality municipal bond funds are looking attractive these days.
As the average U.S. stock fund registered more losses so far this year, with seemingly no end in sight, the returns from tax-free bonds are pretty darn good.
High-quality tax-free bond funds posted an average gain of 4% for the first half, while the average domestic equity fund fell 12.1%. The average high-quality bond fund returned just 2% for the same period.
Given rising unemployment, corporate accounting scandals, and an unfriendly stock market, relatively risk-free municipal bonds have also become more attractive to investors.