We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Grab These 3 Municipal Bond Funds for Risk-Free Returns
Read MoreHide Full Article
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.
Vanguard Ltd-Term Tax Exempted 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 Tax Exempted has three-year annualized returns of 1.9%. As of October 2024, VMLTX had 85.6% of its assets invested in Total Misc. Bonds.
American Funds Tax-Aware Conservative Growth and Income Portfolio invests in a variety of U.S. funds in different combinations and weightings. The funds that it invests in generate income from their investments and may include growth-and-income, equity-income, balanced and fixed-income funds.
American Funds Tax-Aware Conservative Growth and Income Portfolio has three-year annualized returns of 5.2%. Andrew B. Suzman has been one of the fund managers of TAIAX since 2012.
Invesco Limited Term Municipal Income seeks income exempted from federal tax by investing most of its assets in investment-grade municipal debt securities that either pay interest, are 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 effective portfolio maturity of five years or less.
Invesco Limited Term Municipal Income has three-year annualized returns of 1.9%. AITFX has an expense ratio of 0.34%.
Image: Bigstock
Grab These 3 Municipal Bond Funds for Risk-Free Returns
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., Vanguard Ltd-Term Tax Exempted (VMLTX - Free Report) , American Funds Tax-Aware Conservative Growth and Income Portfolio (TAIAX - Free Report) and Invesco Limited Term Municipal Income (AITFX - 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.
Vanguard Ltd-Term Tax Exempted 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 Tax Exempted has three-year annualized returns of 1.9%. As of October 2024, VMLTX had 85.6% of its assets invested in Total Misc. Bonds.
American Funds Tax-Aware Conservative Growth and Income Portfolio invests in a variety of U.S. funds in different combinations and weightings. The funds that it invests in generate income from their investments and may include growth-and-income, equity-income, balanced and fixed-income funds.
American Funds Tax-Aware Conservative Growth and Income Portfolio has three-year annualized returns of 5.2%. Andrew B. Suzman has been one of the fund managers of TAIAX since 2012.
Invesco Limited Term Municipal Income seeks income exempted from federal tax by investing most of its assets in investment-grade municipal debt securities that either pay interest, are 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 effective portfolio maturity of five years or less.
Invesco Limited Term Municipal Income has three-year annualized returns of 1.9%. AITFX has an expense ratio of 0.34%.
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.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>