Popular Municipal Bond Mutual Funds
Municipal bond mutual fund is part of fixed income mutual fund. This muni bond fund utilizes its assets to purchase high quality municipal bonds offered by states in U.S. The interest from this fund is tax free from federal income tax rate. It may be exempted from state or local tax as well. The total returns from this fund may be higher than other taxable bond fund, depending on your tax bracket.These best municipal bond mutual funds for 2013 are selected based on its performance history and potential future performance. Some of these best muni bond funds don’t have a sales load and transaction fee. Some funds do have a sales load. The funds are ranked with 4 star rating or higher by Morningstar. You may find the fund review below and other fund information.
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| Best Muni Bond Mutual Funds |
Best municipal bond mutual funds for 2013 & 2014 are:
- Bernstein Diversified Municipal fund (SNDPX)
- USAA Tax Exempt Intermediate-Term fund (USATX)
- Wells Fargo Advantage Short Term Municipal Bond fund (STSMX)
- Vanguard High-Yield Tax-Exempt fund (VWAHX)
- T. Rowe Price Summit Municipal Income fund (PRINX)
- Wells Fargo Advantage Municipal Bond fund (SXFIX)
- Wells Fargo Advantage Intermediate Tax/AMT-Free fund (SIMBX)
- SEI Tax-Exempt Tax-Advantaged Income fund
- GuideMark Tax-Exempt Fixed Income fund
- BNY Mellon Municipal Opportunities fund
- American Funds Tax-Exempt Bond fund
- Vanguard Intermediate-Term Tax-Exempt fund
Bernstein Diversified Municipal (SNDPX)
Bernstein Diversified Municipal fund utilizes its assets to purchase a portfolio of high quality municipal securities. This best muni bond mutual fund is currently managed by a team of portfolio managers. They are R.B. Davidson III, Michael Brooks, Fred S. Cohen, Wayne Godlin and Terrance T. Hults.This muni bond fund has $5.5 billion of total net assets. It requires a minimum initial investment of $25,000 for brokerage account. Investors of this fund receive a tax free dividend yield of 2.74%. The last distribution was given in February 19, 2013 with $0.03. The current share price is $14.74.
Best Municipal Bond Mutual Funds 2011
The year-to-date return of this fund is 0.48%. It is ranked with 5-stars and Bronze rating by Morningstar. US News also ranks it as one of the top municipal bond funds. It has an excellent performance with 22 years of positive return and only 1 year of negative return. Based on the load adjusted returns, the fund performance is listed as below:
- 1-year: 2.01%
- 3-year: 4.06%
- 5-year: 4.03%
- 10-year: 3.78%
USAA Tax Exempt Intermediate-Term Fund (USATX)
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| USAA fund |
Since the inception in 1982, this USATX fund has achieved 27 years of positive return. It has its 1 year total returns in 2009 (18.28%). The worst 1 year return was occurred in 2008 with -7.33%. The fund has 0.99% of YTD return and 6.48% of 5-year annualized return. It has an average maturity of 9.13 years and an average duration of 4.4 years.
Top Performing Tax Free Municipal Bond Mutual Funds 2011
The top 5 holdings as of January 2013 are Harris County Tex Indl Dev Corp (1.33%), Il State Vr Go Ser (1.24%), California St (0.97%), Denver Colo Health & Hosp Ser A (0.95%) and Golden St Tobacco Securitization (0.91%).
Wells Fargo Advantage Short Term Municipal Bond Fund (STSMX)
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| Wells Fargo Advantage |
These fund’s benchmarks are Barclays 1-and 3-year Composite Municipal Bond Index and Lipper Short Municipal Debt Funds Average. The best 1-year total return was achieved in 2009 with 10.43% and the worst in 2008 with -1.39%. The 3-year beta risk is 0.15. This best Wells Fargo mutual fund requires a minimum initial investment of $2,500 for brokerage account.
As of January 2013, the top holdings of this no load fund are Houston TX Utility Systems Revenue (1.76%), Indiana Health + Edl Fac Fing Insmed Adjustable Var (1.39%), Municipal Energy Acquisition Corporation PFOTER Tennessee Gas Project Series (1.37%), Illinois St Ils Adj Var (1.28%) and Suffolk County NY SFK Fixed (1.07%).
Vanguard High-Yield Tax-Exempt Fund (VWAHX)
Vanguard High-Yield Tax-Exempt Fund uses its assets to buy investment-grade municipal bonds. It has large assets of $8.1 billion. Mathew M. Kiselak is the current portfolio manager. The annual expense ratio is a low 0.20%. This muni bond fund has a high yield of 3.70%. The annual holdings turnover as of February 14, 2013 is 20.00%. The fund’s NAV is $11.25.In 2013, this top muni bond fund has YTD return of 1.04%. Morningstar ranks it with Silver and 5-stars rating. Based on the load adjusted returns, the fund has returned 7.03% over the past 1-year, 5.87% over the past 5-year and 5.40% over the past decade. The fund has average maturity of 6.6 years and average duration of 6.1 years. As of January 2013, it has a total of 1072 bonds.
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| PRINX fund |
Managed by Konstantine B. Mallas, this T. Rowe Price Summit Municipal Income Fund invests majority of its assets in high quality municipal bonds. This PRINX fund is part of Muni National Long mutual fund. It has below average expense ratio of 0.50% per year. The total assets are $848.4 million only. This no load muni bond fund has a high yield of 3.68%. The fund has low annual holdings turnover of 9.50%.
This best tax free municipal bond mutual fund has 5-stars rating from Morningstar with a record of 16 years of positive return and 3 years of negative return. The fund has 1.08% year-to-date return. It is a no load fund, so there is no management fee and no front-end sales load fee. It can be purchased from 73 brokerages.
The top 10 largest holdings (as of January 2013) represent 10.30% of total net assets. They are CLARK CO NV ARPT B, CT ST HEFA REV STAMFORD HOSP SR J, LWR CO RVR TX REV AUTH SR A, MD ST TRANS AUTH BWI ARPT PRJ AMT SR B, etc. In this fund, 94.9% of the total net assets are allocated in Domestic Bond and the remaining 5.1% in Cash.
Wells Fargo Advantage Municipal Bond Fund (SXFIX)
Wells Fargo Advantage Municipal Bond Fund utilizes its assets to buy a portfolio of municipal securities that pay interest exempt from federal income tax. It is managed by Lyle J. Fitterer and Robert J. Miller. This Wells Fargo Advantage fund has 5-stars rating from Morningstar. The total net assets are $3.2 billion. It also has 0.78% of annual expense ratio. The benchmark of this fund is Barclays Municipal Bond Index.
The fund has been in the market for over 25 years since 1986. The best 1-year total return within 22 years of positive return was in 2009 with 24.40%. Based on the load adjusted returns, the fund has returned 6.71% over the past 5-years and 6.46% over the past 10-years.
The top holdings are Puttable Floating Option Tax E Putgen Adjustable Var (1.89%), Puerto Rico Electric Revenue P-Float (1.80%), New Jersey State Econ Dev Auth (1.55%) and Puerto Rico Sales Tax Financing Corporation (1.47%). As of January 2013, it has 735 of total securities with 64.61% of turnover rate.
Muni Bond Mutual Fund Information
| No | Fund Description | Ticker | Rating | Expense Ratio | Yield | Net Assets (mil) | Min Invest |
|---|---|---|---|---|---|---|---|
| 1 | Bernstein Diversified Municipal | SNDPX | 5 | 0.56 | 2.74 | 5,500 | 25,000 |
| 2 | USAA Tax Exempt Intermediate-Term | USATX | 5 | 0.54 | 3.64 | 3,400 | 3,000 |
| 3 | Wells Fargo Advantage S/T Muni Bd Inv | STSMX | 5 | 0.63 | 1.33 | 5,300 | 2,500 |
| 4 | Vanguard High-Yield Tax-Exempt | VWAHX | 5 | 0.2 | 3.7 | 8,100 | 3,000 |
| 5 | T. Rowe Price Summit Municipal Inc | PRINX | 5 | 0.5 | 3.68 | 849 | 25,000 |
| 6 | Wells Fargo Advantage Municipal Bond Inv | SXFIX | 5 | 0.78 | 2.74 | 3,200 | 2,500 |
| 7 | Wells Fargo Advantage Interm T/AmtF Inv | SIMBX | 5 | 0.73 | 2.53 | 2,000 | 2,500 |
| 8 | SEI Tax-Exempt Tax-Advantaged Income A | SEATX | 5 | 0.87 | 4.11 | 523 | 100,000 |
| 9 | GuideMark Tax-Exempt Fixed Inc Service | GMTEX | 5 | 1.29 | 2.88 | 76 | - |
| 10 | BNY Mellon Municipal Opportunities Inv | MOTIX | 5 | 0.93 | 3.14 | 991 | 10,000 |
| 11 | American Funds Tax-Exempt Bond A | AFTEX | 4 | 0.55 | 3.48 | 10,100 | 250 |
| 12 | Vanguard Interm-Term Tx-Ex Inv | VWITX | 4 | 0.2 | 3.04 | 38,800 | 3,000 |
| 13 | Fidelity Municipal Income | FHIGX | 4 | 0.46 | 3.52 | 6,800 | 10,000 |
| 14 | Fidelity Intermediate Municipal Income | FLTMX | 4 | 0.4 | 2.84 | 5,200 | 10,000 |
| 15 | Western Asset Managed Municipals A | SHMMX | 4 | 0.65 | 3.84 | 5,800 | 1,000 |
| 16 | Fidelity Short-Intermediate Muni Income | FSTFX | 4 | 0.48 | 1.73 | 4,400 | 10,000 |
| 17 | USAA Tax Exempt Long-Term | USTEX | 4 | 0.52 | 3.89 | 2,900 | 3,000 |
| 18 | Fidelity Tax-Free Bond | FTABX | 4 | 0.25 | 3.47 | 2,500 | 25,000 |
| 19 | DWS Managed Municipal Bonds A | SMLAX | 4 | 0.76 | 4.04 | 5,700 | 1,000 |
| 20 | T. Rowe Price Summit Municipal Intm | PRSMX | 4 | 0.5 | 2.85 | 2,400 | 25,000 |
| 21 | Lord Abbett Intermediate Tax Free A | LISAX | 4 | 0.66 | 2.81 | 4,300 | 1,000 |
| 22 | Thornburg Limited-Term Muni A | LTMFX | 4 | 0.72 | 1.95 | 6,500 | 5,000 |
| 23 | USAA Tax Exempt Short-Term | USSTX | 4 | 0.55 | 2.08 | 2,200 | 3,000 |
| 24 | BlackRock National Municipal Inv A | MDNLX | 4 | 0.72 | 3.63 | 5,400 | 1,000 |
| 25 | T. Rowe Price Tax-Free Shrt-Interm | PRFSX | 4 | 0.5 | 1.71 | 2,000 | 2,500 |
Municipal Bond Mutual Fund Performance
| No | Fund Description | Ticker | YTD return | 1-Year Return % | 3-Year Return % | 5-Year Return % | 10-Year Return % |
|---|---|---|---|---|---|---|---|
| 1 | Bernstein Diversified Municipal | SNDPX | 0.48 | 2.41 | 3.9 | 4.47 | 3.71 |
| 2 | USAA Tax Exempt Intermediate-Term | USATX | 0.99 | 5.87 | 6.46 | 6.48 | 4.84 |
| 3 | Wells Fargo Advantage S/T Muni Bd Inv | STSMX | 0.37 | 1.76 | 2.51 | 3.46 | 3.37 |
| 4 | Vanguard High-Yield Tax-Exempt | VWAHX | 1.04 | 7.21 | 7.36 | 6.68 | 5.34 |
| 5 | T. Rowe Price Summit Municipal Inc | PRINX | 1.08 | 7.43 | 7.37 | 6.97 | 5.41 |
| 6 | Wells Fargo Advantage Municipal Bond Inv | SXFIX | 1.18 | 7.32 | 7.72 | 7.45 | 6.37 |
| 7 | Wells Fargo Advantage Interm T/AmtF Inv | SIMBX | 0.8 | 4.99 | 6.05 | 5.88 | 4.99 |
| 8 | SEI Tax-Exempt Tax-Advantaged Income A | SEATX | 1.23 | 11.17 | 8.56 | 7.16 | N/A |
| 9 | GuideMark Tax-Exempt Fixed Inc Service | GMTEX | 0.26 | 4.46 | 5.52 | 5.48 | 3.56 |
| 10 | BNY Mellon Municipal Opportunities Inv | MOTIX | 1.24 | 7.88 | 8.07 | N/A | N/A |
| 11 | American Funds Tax-Exempt Bond A | AFTEX | 0.9 | 6.7 | 6.77 | 6.14 | 4.73 |
| 12 | Vanguard Interm-Term Tx-Ex Inv | VWITX | 0.74 | 4.31 | 5.51 | 5.83 | 4.52 |
| 13 | Fidelity Municipal Income | FHIGX | 0.63 | 5.95 | 6.72 | 6.31 | 5.05 |
| 14 | Fidelity Intermediate Municipal Income | FLTMX | 0.55 | 3.95 | 4.88 | 5.17 | 4.41 |
| 15 | Western Asset Managed Municipals A | SHMMX | 1.07 | 7.22 | 7.41 | 7.28 | 5.79 |
| 16 | Fidelity Short-Intermediate Muni Income | FSTFX | 0.39 | 1.7 | 2.67 | 3.42 | 3.05 |
| 17 | USAA Tax Exempt Long-Term | USTEX | 1.11 | 7.29 | 7.65 | 6.85 | 5.15 |
| 18 | Fidelity Tax-Free Bond | FTABX | 0.65 | 6.2 | 6.76 | 6.61 | 5.28 |
| 19 | DWS Managed Municipal Bonds A | SMLAX | 1.14 | 6.83 | 6.69 | 6.72 | 5.04 |
| 20 | T. Rowe Price Summit Municipal Intm | PRSMX | 0.87 | 4.2 | 5.25 | 5.71 | 4.48 |
| 21 | Lord Abbett Intermediate Tax Free A | LISAX | 0.79 | 5.03 | 6.12 | 6.5 | N/A |
| 22 | Thornburg Limited-Term Muni A | LTMFX | 0.62 | 2.49 | 3.97 | 4.6 | 3.52 |
| 23 | USAA Tax Exempt Short-Term | USSTX | 0.41 | 2.08 | 3.02 | 3.55 | 3.07 |
| 24 | BlackRock National Municipal Inv A | MDNLX | 1.18 | 6.94 | 7.86 | 6.82 | 5.33 |
| 25 | T. Rowe Price Tax-Free Shrt-Interm | PRFSX | 0.79 | 1.93 | 2.88 | 3.81 | 3.16 |
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