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3 Top-Ranked Municipal Bond Funds to Reduce Your Portfolio 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 exempt 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.
Eaton Vance Total Return Bond fund invests most of its net assets, plus any borrowings for investment purposes, in bonds and other fixed- and floating-rate income instruments, including corporate bonds, loans, U.S. government securities, commercial paper, mortgage-related securities and other asset-backed securities, municipal and foreign and emerging markets debt, structured notes, private placements, convertibles and other hybrid securities.
Eaton Vance Total Return Bond fund has three-year annualized returns of 5.8%. As of the end of March 2026, EBABX had 34.8% of its net assets invested in Miscellaneous Bonds.
MFS Municipal High Income fund invests at least 80% of net assets (including borrowings for investment purposes) in securities and other investments whose interest is exempt from U.S. federal income tax, though interest may be subject to the federal alternative minimum tax.
MFS Municipal High Income fund has three-year annualized returns of 5.6%. MMHYX has an expense ratio of 0.66%.
Eaton Vance High-Yield Municipal Inc fund invests most of its net assets (plus borrowings) in municipal obligations, including notes and tax-exempt commercial paper, issued by the United States.
Eaton Vance High-Yield Municipal Inc fund has three-year annualized returns of 4.8%. Cynthia J. Clemson has been the fund manager of ETHYX since September 2004.
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3 Top-Ranked Municipal Bond Funds to Reduce Your Portfolio 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 exempt 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 top-ranked municipal bond funds, namely, Eaton Vance Total Return Bond (EBABX - Free Report) , MFS Municipal High Income (MMHYX - Free Report) and Eaton Vance High-Yield Municipal Inc (ETHYX - 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.
Eaton Vance Total Return Bond fund invests most of its net assets, plus any borrowings for investment purposes, in bonds and other fixed- and floating-rate income instruments, including corporate bonds, loans, U.S. government securities, commercial paper, mortgage-related securities and other asset-backed securities, municipal and foreign and emerging markets debt, structured notes, private placements, convertibles and other hybrid securities.
Eaton Vance Total Return Bond fund has three-year annualized returns of 5.8%. As of the end of March 2026, EBABX had 34.8% of its net assets invested in Miscellaneous Bonds.
MFS Municipal High Income fund invests at least 80% of net assets (including borrowings for investment purposes) in securities and other investments whose interest is exempt from U.S. federal income tax, though interest may be subject to the federal alternative minimum tax.
MFS Municipal High Income fund has three-year annualized returns of 5.6%. MMHYX has an expense ratio of 0.66%.
Eaton Vance High-Yield Municipal Inc fund invests most of its net assets (plus borrowings) in municipal obligations, including notes and tax-exempt commercial paper, issued by the United States.
Eaton Vance High-Yield Municipal Inc fund has three-year annualized returns of 4.8%. Cynthia J. Clemson has been the fund manager of ETHYX since September 2004.
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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