Best Tax Free Municipal Bond Funds

Tax Free Municipal Bond Funds

Tax free municipal bond funds are included by most investors for a diverse investment portfolio, but which ones are the best? The answer will depend on the investment strategies and goals, as well as the acceptable risk levels, but there are some which are ideal for most investors. The best municipal bond funds are ones which offer the investor tax advantages, have a good history and track record, and are given high ratings by independent rating companies like Lipper, Inc. One of the highly rated tax free municipal bond funds is DWS Strategic High Yield Tax-Free Fund, for investors looking for a high yield and willing to take more risk.

Tax free municipal bonds are a popular investment, and funds that include a number of these bonds offer diversity and a larger range of holdings with a single investment. Franklin High Yield Tax-Free Income Fund has a high yield over the last ten years, and this is considered one of the best tax free municipal bond funds for some investors. Because this is a high yield fund there may be higher risks involved as well though. Insured municipal bonds can lower the risks with these investments, because the payment is insured, but not all municipal bonds can be insured and this will depend on the bond credit rating and other factors.

The RS Tax-Exempt Fund is another fund that is considered one of the best tax free municipal bond funds by some experts. This fund is rated as high credit quality and long duration, and is a popular choice with some investors. There are several types of municipal bonds, and each bond fund will include different risk levels, holdings, minimum investment amounts, expenses and fees, and other variables. What is the best choice for one investor may not be right for another. It is important that each fund possibility is evaluated and compared closely, so that the right fund for the investment strategy and risk level being used is chosen.