Municipal bond fund

(redirected from Municipal Bond Funds)

Municipal bond fund

A mutual fund that invests in bonds issued by state, city, and/or local governments. The interest obtained from these bonds is passed through to shareholders and is generally free of federal (and sometimes state and local) income taxes.

Municipal Bond Fund

A mutual fund that invests predominantly or exclusively in municipal bonds. A municipal bond fund is often tax-efficient, as municipal bonds are exempt from federal taxes and in some circumstances also from state and local taxes. As a result, municipal bond funds tend to be attractive to persons who fall into higher tax brackets. Municipal bond funds generally carry lower risks than mutual funds investing primarily in stocks, but the levels of risk vary according to the credit ratings of the municipalities whose bonds are represented in the fund.

municipal bond fund

A mutual fund that invests in tax-exempt securities and passes through tax-free current income to its shareholders. Some municipal bond funds purchase long-term securities that provide a relatively high current yield but vary substantially in price with changes in interest rates. Other funds choose short-term securities that have lower yields but fluctuate little in value. Municipal bond funds differ from municipal bond unit trusts in that the funds manage the bond portfolios and charge an annual management fee. See also double-exempt fund, junk muni-bond fund, tax-exempt money market fund.

Municipal bond fund.

Municipal bond funds invest in municipal bonds. Interest earnings from these funds are free from federal income tax but may be subject to the alternative minimum tax (AMT).

In addition, some mutual fund companies offer funds that invest exclusively in municipal bonds offered by a single state.

One advantage of muni bond funds is that buyers can invest a much smaller amount than they would need to buy a municipal bond on their own. Another advantage is that they pay income monthly rather than semiannually.

References in periodicals archive ?
Municipal bond funds may be a cure for tax headaches
ranked as the best manager of municipal bond funds.
BOSTON -- Eaton Vance Management, the Boston-based investment adviser, today announced the monthly distributions declared on the common shares of twelve of its closed-end insured municipal bond funds ("Funds").
Most of my money is invested in municipal bond funds.
Common shares of the Eaton Vance Insured Municipal Bond Funds are traded on the American Stock Exchange.
BOSTON -- As of November 1, 2007, nine of the Eaton Vance state and national closed-end municipal bond funds which primarily invest in municipal obligations insured as to principal and interest payments will revise a current investment policy that at least 80% of total assets will normally be invested in municipal obligations rated in the highest category at the time of investment (which is Aaa by Moody's or AAA by S&P or Fitch or, if unrated, determined to be of comparable quality by the adviser).
All of Franklin Templeton's municipal bond funds (Class A shares) ranked in the top two quartiles of their respective Lipper peer groups for total return for the five- and 10-year periods ended December 31, 2006.
BOSTON, March 2, 2015 /PRNewswire/ -- Eaton Vance closed-end municipal bond funds (the "Funds") announced distributions today as detailed below.
2, 2014 /PRNewswire/ -- Eaton Vance closed-end municipal bond funds (the "Funds") announced distributions today as detailed below.
E[acute accent]Common shares of Eaton Vance Insured Municipal Bond Funds are traded on the American Stock Exchange.
BOSTON, May 30, 2014 /PRNewswire/ -- Eaton Vance Management, the Boston-based investment adviser, today announced the monthly distributions declared on the common shares of thirteen of its closed-end municipal bond funds (the "Funds").

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