Noteworthy Municipal-Bond Funds
These offerings provide tax-efficiency for the income-minded investor.
For the income-oriented, tax-conscious investor, municipal-bond funds have long been a compelling investment option. But the asset class began bleeding assets in late 2010 and has continued to do so in 2011, spurred on by interest-rate jitters and negative headlines about municipal finances.
True, not all munis are safe, but investors can take steps to reap the tax-free income that most munis deliver while also cushioning on the downside.
Diversification has been called investing's only free lunch, so one way to put a damper on risk is to take a pass on state-specific muni bonds and funds and instead invest in a muni fund with exposure to high-quality bonds from all throughout the United States. With that universe as a starting point, we turned to the Premium Fund Screener to layer on other additional criteria to unearth some topnotch municipal offerings that keep a lid on volatility.
Esther Pak does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.