Municipal Short-Term Bond Fund(redirected from Municipal Short-Term Bond Funds)
Municipal Short-Term Bond Fund
A mutual fund that invests predominantly or exclusively in municipal bonds with maturities of less than a few years. The idea behind a short-term bond fund is to provide a return at little risk (compared to other investments) that is nonetheless better than the risk-free rate of return. Because it invests in municipal bonds, dividends from the fund are tax-free at the federal level (though they may be subject to state taxes unless all bonds in the fund are issued in the state where the holder resides).