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Buy These 3 Municipal Bond Funds to Lessen Your Portfolio Risk
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Municipal bonds, or "muni bonds," comprise debt securities issued by various states, cities, counties and other governmental entities to raise money to build roads, schools and a host of other projects for public good. These municipal securities make regular interest payments, usually semi-annually, and 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 bond 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.
Victory Tax Exempt Short Term Fund seeks to provide investors with interest income that is exempt from federal income tax. USSTX invests primarily in investment-grade tax-exempt securities differentiated by maturity limitations.
Victory Tax Exempt Short Term Fund has three-year annualized returns of 2.1%. USSTX has an expense ratio of 0.46%.
American High-Income Municipal Bond seeks to provide a high level of current income exempt from regular federal taxes. AMHIX invests its assets in tax-exempt securities.
American High-Income Municipal Bond has three-year annualized returns of 2%. Chad M. Rach has been one of the fund managers of AMHIX since October 2011.
Putnam Strategic Intermediate Muncpl fund seeks high current income exempt from federal income tax. PPNAX invests mainly in bonds that pay interest that is exempt from federal income tax, but that may be subject to federal alternative minimum tax, are rated AAA (or the equivalent), insured (as to payment of principal and interest) and/or escrowed by securities guaranteed by the U.S. government and have intermediate to long-term maturities (three years or longer).
Putnam Strategic Intermediate Muncpl has a three-year annualized return of 1.7%. As of October 2024, PPNAX with 67.1% of its assets invested in Misc Bonds.
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Buy These 3 Municipal Bond Funds to Lessen Your Portfolio Risk
Municipal bonds, or "muni bonds," comprise debt securities issued by various states, cities, counties and other governmental entities to raise money to build roads, schools and a host of other projects for public good. These municipal securities make regular interest payments, usually semi-annually, and 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 bond 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 municipal bond funds, viz., Victory Tax Exempt Short Term Fund (USSTX - Free Report) , American High-Income Municipal Bond (AMHIX - Free Report) and Putnam Strategic Intermediate Muncpl (PPNAX - 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.
Victory Tax Exempt Short Term Fund seeks to provide investors with interest income that is exempt from federal income tax. USSTX invests primarily in investment-grade tax-exempt securities differentiated by maturity limitations.
Victory Tax Exempt Short Term Fund has three-year annualized returns of 2.1%. USSTX has an expense ratio of 0.46%.
American High-Income Municipal Bond seeks to provide a high level of current income exempt from regular federal taxes. AMHIX invests its assets in tax-exempt securities.
American High-Income Municipal Bond has three-year annualized returns of 2%. Chad M. Rach has been one of the fund managers of AMHIX since October 2011.
Putnam Strategic Intermediate Muncpl fund seeks high current income exempt from federal income tax. PPNAX invests mainly in bonds that pay interest that is exempt from federal income tax, but that may be subject to federal alternative minimum tax, are rated AAA (or the equivalent), insured (as to payment of principal and interest) and/or escrowed by securities guaranteed by the U.S. government and have intermediate to long-term maturities (three years or longer).
Putnam Strategic Intermediate Muncpl has a three-year annualized return of 1.7%. As of October 2024, PPNAX with 67.1% of its assets invested in Misc 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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