Summary

• High yield munis carry more credit risk but have defaulted at far lower rates than comparable corporate bonds.
• Investment grade munis offer stability and very low default rates, making them a core tax-efficient holding.
• The two segments play different roles.
• Most investors may benefit from owning both based on income needs and risk tolerance.

High yield and investment grade munis behave differently in ways that matter. Understanding the credit profiles, yield trade-offs, and tax advantages of each is key to building a smarter muni allocation.

What Is the Difference

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