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March 30, 2015

Muni bond returns: 2015 won't be like 2014

  • Barclays Municipal Bond index returned 9.1 percent in 2014. Gains are still likely in coming years, but likely closer to 2 percent or 3 percent.
    • By STAN CHOE
    AP Business Writer

    NEW YORK — Conditions were nearly perfect for municipal bonds last year, leading to sizeable returns. Perfection never lasts, though, and managers of municipal-bond funds are forecasting more modest returns in upcoming years.

    The backdrop for municipal bonds last year was as pleasant as the first warm, spring breeze: Interest rates were falling, the economy was strengthening, demand was high for bonds that pay tax-free income and supply was relatively low. Add it up, and the Barclays Municipal Bond index returned 9.1 percent in 2014. Just don't expect a repeat.


     
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