Municipal bonds are drawing increased attention as investors seek stability amid equity market uncertainty, with recent volatility making tax-exempt yields more attractive on both an absolute and relative basis. Despite negative year-to-date returns across much of the muni market, relative valuations compared to taxable fixed income suggest excess return potential ahead. 

Longer duration exposure gives munis sensitivity to interest rate changes, and if the Federal Reserve moves toward cuts later this year, investors could benefit from both quality and yield opportunities. 

American Century offers strategies like TAXF and CATF that combine diversification, credit research, and active management, while also providing tax efficiency within an ETF wrapper. For California investors in particular, CATF can deliver taxable-equivalent yields above 8%, highlighting the value of tax-exempt strategies in high-bracket states. 

Finsum: Active management adds further advantages, including the ability to navigate sectors and credit qualities excluded from passive indexes.