Municipal bond funds that use borrowing as a way to juice returns had a banner month in November, surging almost 12%. Some market watchers say that’s only just the start.

Leveraged closed-end muni funds rallied along with the broader market as evidence of slowing job growth and cooling inflation convinced traders that the Federal Reserve’s rate-rise cycle is over. Further gains may be in store should the central bank pivot to cutting rates next next year, as many now expect.

Forbes' William Baldwin interviews Erik Herzfeld about opportunities in the closed-end fund space that are often missed by investors.

Investors looking for bargains in the municipal-bond market may find opportunities in closed-end funds that don’t borrow to boost returns.

Unlevered municipal bond closed-end funds traded at a discount to their net asset value of as much 12.6%, according to data compiled by Bloomberg. The biggest, Nuveen LLC’s $1.9 billion Municipal Value Fund, is trading at a 7.2% discount with a tax-exempt yield of 3.97%. Over 20 years, its average discount is 2.3%.

We are thrilled to share that Thomas J. Herzfeld Advisors has been recognized for excellence and achievement with USA TODAY. Best Financial Advisory Firms of 2023 Award Recipient.