Gaining Perspective

How Muni-Bond ETFs Help with Tax-Loss Harvesting

Dec 21, 2023

Courtney Wolf, muni portfolio manager at Capital Group, discusses the benefits of tax-loss harvesting via active fixed income ETFs. They explore investing in portfolio construction, the advantages of the active Muni ETF CGMU, and the construction and positioning of CGMU. They also address volatility in the bond market and the benefits of active ETFs in the municipal sector.

17:15

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Episode guests

Courtney Wolf

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Quick takeaways

Putting cash to work in bonds and duration can be beneficial after the Fed stops hiking rates, as shown by the 6% return on the Muni bond index in November.

Active Muni ETFs like CGMU offer transparency, liquidity, and tax efficiency, making them an attractive option for tax loss harvesting strategies.

Deep dives

The importance of deploying cash and using tax loss harvesting

Courtney Wolf suggests that despite ongoing market volatility and uncertainty about 2024, it is a critical time for investors to put their cash to work. History has shown that owning bonds and duration can be beneficial once the Fed stops hiking rates. November saw over a 6% return on the Muni bond index, highlighting the power of duration when the cycle turns. Moreover, the recent market volatility presents opportunities for tax loss harvesting, which advisors should discuss with their clients to maximize their benefits in terms of portfolio construction.

Introduction

4min

Investing in Portfolio Construction and the Macro Environment

1min

Active Muni ETF and Tax-Loss Harvesting

3min

Construction of CGMU, Long Duration Positioning, and Active View on Sectors

3min

Volatility in the Bond Market: Opportunities and Strategies

6min

As 2023 is nearing its end, tax-loss harvesting season is in full swing. This is often top of mind for advisors and their clients. But Capital Group is seeing some advisors hesitate to harvest losses due to ongoing volatility in the equity and bond markets, and general uncertainty about 2024.

My guest, Courtney Wolf, joins me today to talk about why to deploy cash and use tax-loss harvesting via active fixed income ETFs. Courtney is a muni portfolio manager at Capital Group and the principal investment officer for the firm’s active muni ETF, CGMU. With nearly two decades of muni investing experience, Coutney will offer her forecast for munis more broadly in 2024 as well.

Here is a link for more information about Capital Group and its resources on active ETFs and tax loss harvesting:

Meet the suite: Get to know Capital Group's ETFs- https://www.capitalgroup.com/advisor/investments/exchange-traded-funds/resources/meet-the-suite.html
Capital Group Municipal Income ETF- https://www.capitalgroup.com/advisor/investments/exchange-traded-funds/details/cgmu
Active ETFs to pursue more control over your clients' tax liabilities- https://www.capitalgroup.com/advisor/investments/exchange-traded-funds.html?cid=p73043655040&ad_id=620524608858&ext_id=&ds_rl=1292280&gclid=CjwKCAjwg-GjBhBnEiwAMUvNWzh8XQRd_WZ2v1JKROrAAb3gOQL6II-7iVU0RLtEZFtlAW8qDkFNkxoCtxMQAvD_BwE&gclsrc=aw.ds
5 ways to pursue greater tax efficiency with ETFs- https://www.capitalgroup.com/advisor/investments/exchange-traded-funds/resources/5-ways-to-pursue-greater-tax-efficiency-with-etfs.html
Capital Ideas Insights – How to harvest tax losses in pursuit of portfolio efficiency- https://www.capitalgroup.com/advisor/investments/exchange-traded-funds/resources/tax-loss-harvesting-improved-efficiency.html
Capital Group 2024 Outlook- https://www.capitalgroup.com/advisor/insights/webinars/2024-outlook.html

A message from Advisor Perspectives and VettaFi: To learn more on this and other topics, check out our full schedule of upcoming CE-approved virtual events.

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Gaining Perspective

How Muni-Bond ETFs Help with Tax-Loss Harvesting

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

The importance of deploying cash and using tax loss harvesting

Advantages of active Muni ETFs for tax loss harvesting

The benefits and construction of CGMU and market insights

Get the Snipd
podcast app

AI-powered
podcast player

Discover
highlights

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moment

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Gaining Perspective

How Muni-Bond ETFs Help with Tax-Loss Harvesting

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

The importance of deploying cash and using tax loss harvesting

Advantages of active Muni ETFs for tax loss harvesting

The benefits and construction of CGMU and market insights

Get the Snipdpodcast app

AI-poweredpodcast player

Discoverhighlights

Save anymoment

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