This article is part of Morningstar’s Guide to Income and Dividend Investing special report.
Municipal bond funds can fill an important role in an income-oriented yet tax-conscious investor's tool kit. Interest earned on muni bonds is generally free from federal income tax and may even be exempt from state and local taxes, depending on where you live. Munis therefore can provide tax advantages to those investors in the highest tax brackets.
Susan Dziubinski does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.