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This Muni Fund Keeps a Lid on Volatility

Bronze-rated Wells Fargo Advantage Ultra Short-Term Municipal Income has delivered solid long-term returns with low volatility, but it can lag more rate-sensitive peers.

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Wells Fargo Advantage Ultra Short-Term Municipal Income (SMUAX) is backed by a well-resourced team that delivers solid long-term returns while keeping volatility low. With these strengths come the fund's Neutral parent rating and uneven fee structure, which could be challenging in today's low-rate environment. So, all considered, this fund earns a Morningstar Analyst Rating of Bronze.

This fund is run by veteran managers Lyle Fitterer and Wendy Casetta. Their strategy includes active management of yield-curve and duration exposure to keep interest-rate risk and volatility in check. As an ultrashort fund, managers keep duration here low--lower than its benchmark, which is the Barclays 1-Year Municipal Index--and well below the average duration of funds in the muni-national short Morningstar Category.

Elizabeth Foos does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.