5 Strong Buy Municipal Bond Mutual Funds
Debt securities will always be the natural choice of the risk-averse investor, because this category of instruments provides regular income flow at low levels of risk. Income from regular dividends helps to ease the pain caused by plunging stock prices. When considering safety of capital invested, municipal bond mutual funds are second only to those investing in government securities. In addition, the interest income earned from these securities are exempt from Federal taxes, and in many cases, from state taxes as well. Below, we will share with you 5 top-rated municipal bond mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) , as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all municipal bond funds, investors can click here to see the complete list of funds. Dreyfus High Yield Municipal Bond Z Fund (MUTF: DHMBX ) seeks a tax-exempted high level of current income. It invests a lion’s share of its assets in municipal securities that are expected to provide returns that are free from Federal income tax. DHMBX is generally expected to maintain dollar-weighted average maturity of more than 10 years. The Dreyfus High Yield Municipal Bond Z Fund is non-diversified and has returned 5.4% over the past one year. As of June 2015, DHMBX held 87 issues, with 3.55% of its assets invested in Tobacco Settlement Financing Corp N Asset 5%. MFS Municipal High-Income Fund A (MUTF: MMHYX ) invests a large chunk of its assets in securities that are expected to pay interest exempted from Federal taxes. It may invest in securities that provide income which are not exempted from Federal alternative minimum tax. The MFS Municipal High-Income Fund A has returned 5.7% over the past one year. MMHYX has an expense ratio of 0.67%, as compared to a category average of 0.95%. Federated Municipal High Yield Advantage F Fund (MUTF: FHTFX ) seeks high current income. The fund invests in securities that are believed to provide Federal tax-free interest income. FHTFX normally invests in long-term securities. It may also invest in securities of medium quality and that are rated below investment grade. The Federated Municipal High Yield Advantage F fund is non-diversified and has returned 5.5% over the past one year. Lee R. Cunningham II is one of the fund managers, and has managed FHTFX since 2009. Delaware National High-Yield Municipal Bond Fund A (MUTF: CXHYX ) invests a major portion of its assets in municipal bonds, interest from which is exempted from Federal income tax. CXHYX focuses on acquiring securities rated below high or medium quality, which are expected to have impressive income prospects with high risk. The Delaware National High-Yield Municipal Bond Fund A has returned 5.7% over the past one year. As of June 2015, CXHYX held 393 issues, with 2.37% of its assets invested in Buckeye Ohio Tob Settlement Fi To 5.875%. American Century High-Yield Municipal Fund Investor (MUTF: ABHYX ) seeks a high level of tax-free current income. The fund invests a majority of its assets in municipal debt securities expected to pay interest income exempted from Federal tax. It emphasizes in investing in securities that are believed to provide high return. ABHYX may invest in securities with interest that is not free from Federal alternative minimum tax. The American Century High-Yield Municipal Fund Investor is non-diversified and has returned 5% over the past one year. ABHYX has an expense ratio of 0.60%, as compared to a category average of 0.95%. Original Post