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Buy These 3 Municipal Bond Funds for Risk Reduction
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The debt securities category will always be the first choice for risk-averse investors because this class of instruments provides a regular income at low levels of risk. Income from regular dividends helps to ease the pain caused by plunging stock prices.
When considering the safety of capital invested, municipal bond mutual funds are second only to those investing in government securities. In addition, interest income earned from these securities is exempt from federal taxes and, in many cases, from state taxes.
Colorado BondShares A Tax-Exempt fund seeks opportunities for capital appreciation. HICOX invests in tax-exempt bonds and other tax-exempt securities, including tax-exempt notes and tax-exempt municipal leases of the State of Colorado, its political subdivisions, municipalities and public authorities.
Colorado BondShares A Tax-Exempt fund has three-year annualized returns of 1.7%. Fred R. Kelly has been one of the fund managers of HICOX since 1990.
Vanguard Ltd-Term Tx-Ex fund invests most of its net assets in municipal bonds with top three credit-rating categories by nationally recognized rating agencies or, determined to be of comparable quality by the fund’s advisors. It also invests a small portion of its net assets in securities with lower credit ratings. VMLTX advisors try to maintain a dollar-weighted average maturity of 2 to 6 years on individual securities.
Vanguard Ltd-Term Tx-Ex fund has three-year annualized returns of 0.6%. VMLTX has an expense ratio of 0.17%.
JPMorgan Tax Aware Real Return Fund seeks after-tax returns by investing most of its net assets in a portfolio of municipal securities, whose interest payments are excluded from federal income tax. TXRAX creates inflation-protected instruments by investing in a combination of municipal securities along with inflation-linked derivatives such as Non-Seasonally Adjusted Consumer Price Index for all Urban Consumers (CPI-U) swaps.
JPMorgan Tax Aware Real Return Fund has three-year annualized returns of 2.2%. As of the end of October 2023, TXRAX held 43.5% of its net assets in miscellaneous bonds.
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Buy These 3 Municipal Bond Funds for Risk Reduction
The debt securities category will always be the first choice for risk-averse investors because this class of instruments provides a regular income at low levels of risk. Income from regular dividends helps to ease the pain caused by plunging stock prices.
When considering the safety of capital invested, municipal bond mutual funds are second only to those investing in government securities. In addition, interest income earned from these securities is exempt from federal taxes and, in many cases, from state taxes.
Below, we share with you three top-ranked municipal bond funds, viz., Colorado BondShares A Tax-Exempt (HICOX - Free Report) , Vanguard Ltd-Term Tx-Ex (VMLTX - Free Report) and JPMorgan Tax Aware Real Return Fund (TXRAX - Free Report) . Each has a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of municipal bond funds.
Colorado BondShares A Tax-Exempt fund seeks opportunities for capital appreciation. HICOX invests in tax-exempt bonds and other tax-exempt securities, including tax-exempt notes and tax-exempt municipal leases of the State of Colorado, its political subdivisions, municipalities and public authorities.
Colorado BondShares A Tax-Exempt fund has three-year annualized returns of 1.7%. Fred R. Kelly has been one of the fund managers of HICOX since 1990.
Vanguard Ltd-Term Tx-Ex fund invests most of its net assets in municipal bonds with top three credit-rating categories by nationally recognized rating agencies or, determined to be of comparable quality by the fund’s advisors. It also invests a small portion of its net assets in securities with lower credit ratings. VMLTX advisors try to maintain a dollar-weighted average maturity of 2 to 6 years on individual securities.
Vanguard Ltd-Term Tx-Ex fund has three-year annualized returns of 0.6%. VMLTX has an expense ratio of 0.17%.
JPMorgan Tax Aware Real Return Fund seeks after-tax returns by investing most of its net assets in a portfolio of municipal securities, whose interest payments are excluded from federal income tax. TXRAX creates inflation-protected instruments by investing in a combination of municipal securities along with inflation-linked derivatives such as Non-Seasonally Adjusted Consumer Price Index for all Urban Consumers (CPI-U) swaps.
JPMorgan Tax Aware Real Return Fund has three-year annualized returns of 2.2%. As of the end of October 2023, TXRAX held 43.5% of its net assets in miscellaneous bonds.
To view the Zacks Rank and the past performance of all municipal bond funds, investors can click here to see the complete list of municipal bond funds.
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