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Buy These 3 Top-Ranked Municipal Bond Funds to Hedge Against Risk
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Municipal bonds, or "muni bonds," comprise debt securities that are issued by various states, cities, counties and other governmental entities to raise money to build roads, schools and a host of other projects for the public good. These municipal securities regularly make interest payments, usually semi-annually, and pay the original investment or principal amount at the time of maturity. Interest paid on such bonds is generally exempted from federal taxes making them especially attractive to people in higher income tax brackets.
Thus, risk-averse investors looking to earn a regular tax-free income may consider municipal bonds mutual funds. These mutual funds are believed to provide regular income while protecting the capital invested. While mutual funds from this category seek to provide dividends more frequently than other bonds, they offer greater stability than those primarily focusing on equity and alternative securities.
Below, we share with you three top-ranked municipal bond funds, namely,Colorado Bond Shares A Tax Exempt Fund (HICOX - Free Report) , Delaware National High Yield Municipal Bond Fund (CXHYX - Free Report) and Invesco Limited Term Municipal Income Fund (AITFX - Free Report) . Each has earned 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 funds, their Zacks Rank and past performance.
Colorado Bond Shares A Tax Exempt Fund invests most of its assets, along with borrowings, if any, in tax-exempt bonds, securities, notes and municipal leases of political subdivisions, municipalities and public authorities in the State of Colorado. HICOX only invests in Tax-Exempted securities.
Colorado Bond Shares A Tax Exempt Fund has five-year annualized returns of 3.6%.As of the end of June 2024, HICOX had 32.3% of its net assets invested in Miscellaneous Bonds.
Delaware National High Yield Municipal Bond Fund seeks a high level of exempted current income byinvesting most of its in assets along with borrowings, if any, in medium- and lower-grade municipal securities, which are exempted from federal income tax, CXHYX also invests in lower-rated municipal securities with higher income potential and involve greater risk.
Delaware National High Yield Municipal Bond Fund has five-year annualized returns of 2.5%. CXHYX has an expense ratio of 0.85%.
Invesco Limited Term Municipal Income Fund seeks income exempted from federal tax by investing most of its assets, along with borrowings, if any, in investment-grade municipal debt securities that either pay interest excluded from gross income for federal income tax purposes or do not produce income that will be considered an item of preference for purposes of the alternative minimum tax. AITFX advisors try to maintain a dollar-weighted average with an effective portfolio maturity of five years or less.
Invesco Limited Term Municipal Income Fundhas five-year annualized returns of 1.7%. Jack Connelly has been the fund manager of AITFX since April 2016.
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Buy These 3 Top-Ranked Municipal Bond Funds to Hedge Against Risk
Municipal bonds, or "muni bonds," comprise debt securities that are issued by various states, cities, counties and other governmental entities to raise money to build roads, schools and a host of other projects for the public good. These municipal securities regularly make interest payments, usually semi-annually, and pay the original investment or principal amount at the time of maturity. Interest paid on such bonds is generally exempted from federal taxes making them especially attractive to people in higher income tax brackets.
Thus, risk-averse investors looking to earn a regular tax-free income may consider municipal bonds mutual funds. These mutual funds are believed to provide regular income while protecting the capital invested. While mutual funds from this category seek to provide dividends more frequently than other bonds, they offer greater stability than those primarily focusing on equity and alternative securities.
Below, we share with you three top-ranked municipal bond funds, namely,Colorado Bond Shares A Tax Exempt Fund (HICOX - Free Report) , Delaware National High Yield Municipal Bond Fund (CXHYX - Free Report) and Invesco Limited Term Municipal Income Fund (AITFX - Free Report) . Each has earned 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 funds, their Zacks Rank and past performance.
Colorado Bond Shares A Tax Exempt Fund invests most of its assets, along with borrowings, if any, in tax-exempt bonds, securities, notes and municipal leases of political subdivisions, municipalities and public authorities in the State of Colorado. HICOX only invests in Tax-Exempted securities.
Colorado Bond Shares A Tax Exempt Fund has five-year annualized returns of 3.6%.As of the end of June 2024, HICOX had 32.3% of its net assets invested in Miscellaneous Bonds.
Delaware National High Yield Municipal Bond Fund seeks a high level of exempted current income byinvesting most of its in assets along with borrowings, if any, in medium- and lower-grade municipal securities, which are exempted from federal income tax, CXHYX also invests in lower-rated municipal securities with higher income potential and involve greater risk.
Delaware National High Yield Municipal Bond Fund has five-year annualized returns of 2.5%. CXHYX has an expense ratio of 0.85%.
Invesco Limited Term Municipal Income Fund seeks income exempted from federal tax by investing most of its assets, along with borrowings, if any, in investment-grade municipal debt securities that either pay interest excluded from gross income for federal income tax purposes or do not produce income that will be considered an item of preference for purposes of the alternative minimum tax. AITFX advisors try to maintain a dollar-weighted average with an effective portfolio maturity of five years or less.
Invesco Limited Term Municipal Income Fundhas five-year annualized returns of 1.7%. Jack Connelly has been the fund manager of AITFX since April 2016.
To view the Zacks Rank and the past performance of all municipal bond funds, investors can click here to see the complete list ofmunicipal bond funds.
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