Any investors hoping to find a Muni - Bonds fund could think about starting with American Funds Tax-Aware Conservative Growth and Income F-1 (TAIFX Quick QuoteTAIFX - Free Report) . TAIFX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

We classify TAIFX in the Muni - Bonds category, an area rife with potential choices. Muni - Bonds funds focus their investments on debt securities issued by state and local governments. These are typically used to pay for the construction of infrastructure, the operation of public schools, and other municipal functions. These securities can come in the form of revenue bonds, which are backed by taxes, as well as " general obligation " bonds that are not backed by a defined source. Investors are usually interested that come with most municipal bonds, which can be especially important for those in higher tax brackets.

History of Fund/Manager

American Funds is based in Los Angeles, CA, and is the manager of TAIFX. American Funds Tax-Aware Conservative Growth and Income F-1 made its debut in May of 2012, and since then, TAIFX has accumulated about $282 million in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. TAIFX has a 5-year annualized total return of 7.85% and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 6.76%, which places it in the top third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of TAIFX over the past three years is 9.94% compared to the category average of 12.99%. Looking at the past 5 years, the fund's standard deviation is 9.31% compared to the category average of 12.63%. This makes the fund less volatile than its peers over the past half-decade.

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, TAIFX is a no load fund. It has an expense ratio of 0.38% compared to the category average of 0.91%. So, TAIFX is actually cheaper than its peers from a cost perspective.

Investors need to be aware that with this product, the minimum initial investment is $250; each subsequent investment needs to be at least $50.

Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.

Bottom Line

Overall, American Funds Tax-Aware Conservative Growth and Income F-1 ( TAIFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

This could just be the start of your research on TAIFXin the Muni - Bonds category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.