No time like the present

An interesting historical pattern suggests seasonal technical factors can present a buying opportunity in the municipal market. The chart below shows a pattern of municipal bond monthly returns as measured by the Bloomberg Barclays Municipal Bond Index over the past 16 years. The graph shows positive returns in months such as January, which has demonstrated technical strength driven by low supply and high demand of municipal bonds. The chart also shows that months such as March, June, and October, with technical weakness driven by larger supply and less demand, can have the potential for negative performance.

What this means for investors

As the pattern shows, these dips, on average, can represent a good buying opportunity for some investors. The next traditional municipal buying opportunity occurs in October. Although this guide represents an average and is not a guarantee, investors can look at the long-term income-generating portion of their asset allocations and potentially use these dips to take advantage of cheaper prices and higher yields. This is especially important given that income is the most important component of total return in municipal bonds over the long term.

The Bloomberg Barclays Municipal Bond Index measures the total return performance of the long-term, investment grade tax-exempt bond market.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt. The Fund may also be subject to prepayment risk, the risk that the principal of a fixed income security that is held by the Fund may be prepaid prior to maturity, potentially forcing the Fund to reinvest that money at a lower interest rate.

High yielding, non-investment-grade bonds (junk bonds) involve higher risk than investment grade bonds.

Substantially all dividend income derived from tax-free funds is exempt from federal income tax. Some income may be subject to state and local taxes and/or the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.


Carefully consider the Funds' investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Funds' prospectuses and their summary prospectuses, which may be obtained by visiting or calling 800 523-1918. Investors should read the prospectus and the summary prospectus carefully before investing.

Investing involves risk, including the possible loss of principal.

Past performance does not guarantee future results.


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