High earners skip treasuries for 3.9% tax-free yield in municipal bonds
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The Invesco National AMT-Free Municipal Bond ETF (PZA) offers a 3.9% tax-free yield, appealing to high earners in the top federal tax bracket. PZA has paid over 217 consecutive monthly distributions since 2007, tracking investment-grade municipal bonds exempt from federal income tax. While the distribution is considered safe, investors face NAV volatility risk due to long-duration exposure. PZA's performance has been stable, but total returns have been flat over five years, highlighting the impact of rising interest rates on bond prices.
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