VKI: 10%-Plus Equivalent Taxable Yield On Municipal Bonds

2025-05-30 09:15:00 ET

Summary

• VKI offers tax-advantaged income through a diversified portfolio of municipal bonds, primarily investment grade, with a focus on federal tax exemption.
• The fund currently yields 8.14% (taxable equivalent of 10.26% for the 22% tax bracket), but recent distribution history has been volatile due to interest rate changes.
• VKI trades at a 7% discount to NAV, but this is not as deep as past discounts. We recommend waiting for a more attractive entry point.

Looking for a way to mitigate some of your tax bite?

Investing in Municipal Bonds can help. "Munis" accomplish this by exempting the interest earned from federal income tax, and sometimes from state taxes, if they were issued in the state where you live. ...

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