Municipal Short-Term Bond Fund

(redirected from National Municipal Short Term Bond Fund)

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).
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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