Normally, municipal bonds are notably safe. General obligation bonds are backed by the taxing power of the governments that issue them, while revenue bonds are tied to specific revenue streams (think toll roads, for example). But during the COVID-19 outbreak, a lot of states and cities are losing out on revenue.

How are municipal bonds doing?

The S&P Municipal Bond Index returned 0.29% for the month, bringing the year-to-date total return to 1.24%. Lower credit quality and longer duration bonds outperformed. Issuance totaled a robust $48 billion, up 40% month- over-month and 23% above the 5-year average, bringing the year-to-date total to $221 billion.

Are municipal bonds reported?

Municipal Bonds (Munis) are interest-bearing debt obligations issued by a state or local municipality. Tax-exempt interest from private activity bonds, taxable for purposes of the Alternative Minimum Tax (AMT), is also reported on Form 1099-INT.

What kind of bonds does Muni national long invest in?

Muni National Long. Muni national long portfolios invest in bonds issued by various state and local governments to fund public projects. The income from these bonds is generally free from federal taxes. To lower risk, these portfolios spread their assets across many states and sectors.

When does a short term municipal bond mature?

A municipal bond’s maturity date (the date when the issuer of the bond repays the principal) may be years in the future. Short-term bonds mature in one to three years, while long-term bonds won’t mature for more than a decade.

What are the risks of investing in municipal bonds?

Investors in municipal bonds face a number of risks, specifically including: Call risk. Call risk refers to the potential for an issuer to repay a bond before its maturity date, something that an issuer may do if interest rates decline — much as a homeowner might refinance a mortgage loan to benefit from lower interest rates.

Is the interest on a municipal bond tax free?

Municipal bonds, sometimes referred to as munis, are issued by various government entities such as states, counties and municipalities. The income from these bond funds is typically exempt from federal taxes and, if issued within your state, the interest will also be free of state income taxes.