Perspectives Blog

The taxman cometh

James Dearborn, Head of Municipal Bonds | March 13, 2014

New and higher taxes will increase what many owe Muni bonds can help mitigate your tax bill Muni yields are attractive vs. many other investment options With tax season fully upon us, many Americans are about to realize the harsh realities of the new tax environment that came into effect January 2013 with the passage of the oddly named American Taxpayer Relief Act of 2012 and the introduction of taxes associated with the Affordable Care Act (A…

What’s the outlook for muni bonds?

James Dearborn, Head of Municipal Bonds | June 19, 2014

Strong YTD performance resulted from falling rates, a dearth of new supply and a resurgent demand by investors seeking attractive taxable-equivalent yields. We believe municipal bonds should continue to perform well in the second half of 2014. Yields on muni bonds are compelling when considering the impact of taxes on non-exempt securities. As we reach the halfway point of 2014, it’s a good opportunity to review our full-year outlook for the m…

Compelling opportunity in municipal bonds

Catherine Stienstra, Senior Portfolio Manager | November 7, 2013

…ot representative of the broad municipal market, and the number of municipal defaults is at its lowest level since at least 2009. Municipal fundamentals continue to improve on the back of increasing sales, income and property taxes. Market movement provides an attractive opportunity to lock in attractive yields Depending on credit quality and maturity, municipal bond investors today may be able to earn taxable-equivalent yields above 8%, far hi…

The case for active muni management

Kimberly Campbell, Senior Portfolio Manager | April 21, 2014

Muni bonds represent an attractive investment opportunity Active management is a value add in these volatile markets Professional money managers can help investors navigate an ever-changing environment Where does one invest in a world of uncertainty? Rising taxes, volatile markets, low yields, economic stagnation, geopolitical unrest. We live in a world of great uncertainty — yet our investment goals remain the same: a comfortable retirement,…

New taxes require strategies to maximize after-tax return

Abram Claude, Vice President, Columbia Management Learning Center | March 18, 2014

Higher earners with taxable investments are most susceptible to triggering the net investment income tax, a surtax of 3.8% that applies to taxable investments. An asset location strategy involves placing a greater percentage of the most tax-sensitive investments in tax-deferred accounts. Retirement plans offer significant opportunities for participants and business owners to reduce taxable income. In 2013, new taxes associated with the Afforda…

Opportunity in lower-quality municipals

Columbia Management, Investment Team | August 15, 2013

…ver the long term. Risk-adjusted performance — strong returns with relatively low volatility — and the attractive risk/return profile of municipal bonds have been very appealing versus other asset classes. What you keep after taxes is what matters Returns of municipal bonds have been magnified by the benefit of their tax-exempt status, most recently by the increase of the highest federal tax rate from 35% to 43.4%.3 In this tax environment, an af…

Capture five tax benefits with a 529 college savings plan

Columbia Management, Investment Team | March 21, 2014

…nt owner, you are always in control of the assets in the 529 plan account. And, 529 account owners can benefit from the following tax advantages: Earnings in your 529 college savings grow exempt from federal and state income taxes, so they have the potential to accumulate faster than they would in comparable taxable investments. There is no federal income tax (and in most states, no state income tax) on withdrawals used to pay for qualified high…