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Ivy Funds introduces Municipal High Income Fund


Ivy Funds has introduced the Ivy Municipal High Income Fund, which carries the same manager and performance history as the Waddell & Reed Advisors Municipal High Income Fund incepte

Ivy Funds has introduced the Ivy Municipal High Income Fund, which carries the same manager and performance history as the Waddell & Reed Advisors Municipal High Income Fund incepted in 1986.

The fund is managed by Michael Walls, who has been with the Ivy Funds organisation for ten years and has experience as a fixed-income investment analyst and as an assistant portfolio manager.

Ivy Funds analysts have outlined the three primary benefits for investors who may consider an allocation to the high-yield municipal bond sector:

• Potential income tax relief: mutual funds that invest primarily in tax-exempt debt, such as municipal bonds, generate interest income that is free from federal income taxes. Bonds issued in the state of the investor’s residence may also generate tax-free income.
• Portfolio diversification: municipal bonds have structural characteristics that are different from other types of fixed-income securities, and respond differently to changes in market conditions, such as changes in credit quality and interest rate policy. These differences have the potential to help reduce overall volatility in a diversified portfolio. In addition, a municipal bond mutual fund allows an investor to further diversify by providing simple and efficient access to a variety of municipal bonds of different maturities and different interest rates.
• Higher income potential: the credit rating of most municipalities is typically lower than the federal government, and tax-exempt bonds are not guaranteed by the government. Higher yielding municipal bonds offer greater income potential in an effort to compensate investors for the assumed higher risk.

‘We believe that the tax relief potential, coupled with the income potential that accompanies higher-yielding municipal bonds, makes this category an attractive one for investors building a diversified portfolio,’ says Thomas W. Butch (pictured), president and chief executive of Ivy Funds Distributor.

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