Re-balance Cycle Reminder All MyPlanIQ’s newsletters are archived here.

For regular SAA and TAA portfolios, the next re-balance will be on Monday, March 13, 2017. You can also find the re-balance calendar for 2017 on ‘Dashboard‘ page once you log in.

As a reminder to expert users: advanced portfolios are still re-balanced based on their original re-balance schedules and they are not the same as those used in Strategic and Tactical Asset Allocation (SAA and TAA) portfolios of a plan.

Please note that we now list the next re-balance date on every portfolio page.

Tax Free Municipal Bond Investments Review

We introduced our tax free municipal bond portfolios in April last year April 25, 2016: Tax Free Municipal Bond Funds & Portfolios. In this newsletter, we will review and discuss these investments.

First, let’s briefly recap the benefits of municipal bond investments. The following is the synopsis of the benefits. 

  • Tax free municipal bonds enjoy federal tax free for their interests or dividends. For state sponsored municipal bonds, they also enjoy tax free for the state that issues these bonds. Thus, they are attractive to high tax bracket investors. 
  • Most tax free municipal bond investors are high tax bracket individual investors, making these investment free from professional or institutional traders. Thus they are often more stable and exhibit more stable price trend. This property makes the trend based tactical investment strategy suitable. 
  • However, before the tax free consideration, these bonds sometimes can have very comparable or even higher interests. Thus, sometimes, these bonds can be even useful for taxable accounts. So these investments shouldn’t be easily discarded completely by tax unconscious investors. 

2016 Municipal Bond Portfolio Performance

First, let’s look at the municipal bond segment performance: 

Portfolio Performance Comparison (as of 2/3/2017):
Ticker/Portfolio Name20161Yr AR3Yr AR5Yr AR10Yr AR
VWSUX (Vanguard Short-Term Tx-Ex Adm)0.4%0.4%0.6%0.7%1.7%
VWIUX (Vanguard Interm-Term Tx-Ex Adm)0.0%-0.9%3.0%2.6%4.0%
VWLUX (Vanguard Long-Term Tax-Exempt Adm)0.1%-0.6%4.4%3.6%4.4%
VWAHX (Vanguard High-Yield Tax-Exempt)0.5%-0.3%4.6%3.9%4.5%
VBMFX (Vanguard Total Bond Market Index Inv)2.3%1.0%2.2%1.9%4.2%

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