Insight
Tax-Equivalent Yield: Leveraging the Power of Tax-Free Income
Earning income tax-free can be extremely attractive and beneficial for all investors, particularly those in higher tax brackets. Learn about tax-equivalent yield and the power of tax-free income.
![A field of yellow flowers set against blue skies. A field of yellow flowers set against blue skies.](/globalassets/assets/insights/hero/insight-tax-equivalent-yield-leveraging-the-power-of-tax-free-income-725x385.jpg)
8/17/2023
5 min read
Topic
Fixed Income
Key takeaways
- Taxes can have a significant impact on investor net income and total return.
- Calculating the tax-equivalent yield for taxable versus tax-exempt investments is a prudent exercise with potentially material results.
- Investing in tax-exempt securities, such as municipal bonds, may offer investors significant benefits, including enhanced net income, total return, portfolio diversification, and risk-adjusted performance.