SCMB: Schwab Offers Low Cost Municipal Bond ETF But Not Great Results
- With the GOP controlling Congress and the White House, current tax rates from 2017 are likely to extend beyond 2025.
- The Schwab Municipal Bond ETF offers a low-cost, tax-efficient investment in U.S. investment-grade, tax-exempt bonds, with a forward yield of 3.34%.
- The ETF tracks the ICE AMT-Free Core U.S. National Municipal Index, focusing on high-quality bonds exempt from federal taxes and AMT.
- While the low fees are attractive, SCMB's return so far lags many of its competitors, thus earning a Sell rating.
- For high-tax state residents, consider funds holding state-issued bonds to maximize tax benefits and potential returns amidst changing political landscapes.
Mohamad Faizal Bin Ramli
Introduction
With the election over and the GOP in slim control of both the Senate and House, plus the White House, odds are that the current tax rates enacted in 2017 will be extended beyond their current
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