Muni Bond Funds Poised for 20% Gains Even After November’s Surge
- Leveraged closed-end funds rallied with broader market
- Steep discount, Fed cuts, activism seen powering returns
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Municipal bond funds that use borrowing as a way to juice returns had a banner month in November, surging almost 12%. Some market watchers say that’s only just the start.
Leveraged closed-end muni funds rallied along with the broader market as evidence of slowing job growth and cooling inflation convinced traders that the Federal Reserve’s rate-rise cycle is over. Further gains may be in store should the central bank pivot to cutting rates next next year, as many now expect.