junk muni-bond fund

Junk Muni-Bond Fund

A mutual fund or other investment company that invests predominately or exclusively in municipal bonds with junk ratings. That is, these funds invest in bonds with so much risk that banks cannot invest in them and that were issued by government entities other than the federal government. The advantages to a junk muni-bond fund are the facts that the extra risk results in higher returns and that municipal bonds are exempt from federal taxes.

junk muni-bond fund

A mutual fund or unit trust that invests in relatively low-grade tax-exempt bonds in order to earn a higher return. Bonds purchased for the fund are rated below investment-grade (that is, lower than BBB), or they are not rated at all.
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