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After Heady Year, Reality Bites Calif. Munis Uncertainty over state's financing role, possible downgrade hurt market.(B)(Making Money In Mutuals)

Investor's Business Daily

| February 01, 2001 | COPYRIGHT 2001 Investor's Business Daily, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

Byline: Claire Mencke

Investor's Business Daily

California muni bonds and related mutual funds have been high on performance lists the past two months.

The state's booming, diverse economy boosted incomes and savings, sparking demand for these tax-exempt investments.

Meanwhile, the state, like many others, is running a budget surplus. That has eliminated much of the need to issue new public bonds.

"There's been very little new supply this year, especially of new b

onds selling at or near par value," said Robert Bigelow. He runs $180 million HighMark California Intermediate Tax-Free Bond Fund. It returned 8.8% in 2000 and 1.96% this year through Tuesday.

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