Municipal Marketplace: Can single state portfolios be advantageous?

We often receive inquiries from clients and prospective clients about single state municipal bond portfolio management.

While such portfolios may have tax advantages (generally the bond interest is exempt from state and local taxation), we believe frequent drawbacks exist that could offset the local tax advantage. We have been a vocal advocate of the view that, in the long run, a national portfolio or a portfolio which has significant geographic diversification, may best serve the client’s interest.