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3 Top-Ranked Municipal Bond Funds for Stable Returns
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Municipal bonds, or "muni bonds," comprise debt securities issued by various states, cities, counties and other governmental entities to raise money to build roads, schools and a host of other projects for the public. These municipal securities regularly pay interest payments, usually semi-annually, and the original investment or principal amount at the time of maturity. Interest paid on such bonds is generally exempted from federal taxes making them especially attractive to people in higher income tax brackets.
Thus, risk-averse investors looking to earn a regular tax-free income may consider municipal bonds mutual funds. These mutual funds are believed to provide regular income while protecting the capital invested. While mutual funds from this category seek to provide dividends more frequently than other bonds, they offer greater stability than those primarily focusing on equity and alternative securities.
Below, we share with you three municipal bond funds, namely, American Funds Tax-Aware Conservative Growth and Income Portfolio (TAIAX - Free Report) , SEI Asset Allocation Trust Conservative Strategy Allocation Fund (SMGAX - Free Report) and AB Bond Fund, Inc. - AB Municipal Bond Inflation Strategy (AUNAX - Free Report) . Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds, their Zacks Rank and past performance.
American Funds Tax-Aware Conservative Growth and Income Portfolio invests most of its net assets in a variety of funds from the United States in various combinations and weights to generate income from their investments and may include growth-and-income, equity-income, balanced and fixed-income funds. TAIAX also focuses on dividend-paying stocks and invests a portion in emerging markets.
American Funds Tax-Aware Conservative Growth and Income Portfolio has three-year annualized returns of 4.0%. As of the end of October 2022, TAIAX had 6 issues.
SEI Asset Allocation Trust Conservative Strategy Allocation Fund invests most of its assets in underlying SEI funds which are in turn diversified across securities and other instruments of various asset classes each of which has its own investment goal. Generally, the underlying SEI funds of SMGAX consist of equity funds, bond and money market funds, and real estate funds.
SEI Asset Allocation Trust Conservative Strategy Allocation Fund has three-year annualized returns of 3.3%. SMGAX has an expense ratio of 0.35% compared with the category average of 0.84%.
AB Bond Fund, Inc. - AB Municipal Bond Inflation Strategy invests most of its net assets in investment-grade, fixed-income municipal securities that pay interest exempt from federal taxation. AUNAX advisors also invest in below-investment-grade, fixed-income securities, otherwise known as junk bonds.
AB Bond Fund, Inc. - AB Municipal Bond Inflation Strategy has three-year annualized returns of 2.2%.Terrance T. Hults has been one of the fund managers of AUNAX since December 2010.
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3 Top-Ranked Municipal Bond Funds for Stable Returns
Municipal bonds, or "muni bonds," comprise debt securities issued by various states, cities, counties and other governmental entities to raise money to build roads, schools and a host of other projects for the public. These municipal securities regularly pay interest payments, usually semi-annually, and the original investment or principal amount at the time of maturity. Interest paid on such bonds is generally exempted from federal taxes making them especially attractive to people in higher income tax brackets.
Thus, risk-averse investors looking to earn a regular tax-free income may consider municipal bonds mutual funds. These mutual funds are believed to provide regular income while protecting the capital invested. While mutual funds from this category seek to provide dividends more frequently than other bonds, they offer greater stability than those primarily focusing on equity and alternative securities.
Below, we share with you three municipal bond funds, namely, American Funds Tax-Aware Conservative Growth and Income Portfolio (TAIAX - Free Report) , SEI Asset Allocation Trust Conservative Strategy Allocation Fund (SMGAX - Free Report) and AB Bond Fund, Inc. - AB Municipal Bond Inflation Strategy (AUNAX - Free Report) . Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds, their Zacks Rank and past performance.
American Funds Tax-Aware Conservative Growth and Income Portfolio invests most of its net assets in a variety of funds from the United States in various combinations and weights to generate income from their investments and may include growth-and-income, equity-income, balanced and fixed-income funds. TAIAX also focuses on dividend-paying stocks and invests a portion in emerging markets.
American Funds Tax-Aware Conservative Growth and Income Portfolio has three-year annualized returns of 4.0%. As of the end of October 2022, TAIAX had 6 issues.
SEI Asset Allocation Trust Conservative Strategy Allocation Fund invests most of its assets in underlying SEI funds which are in turn diversified across securities and other instruments of various asset classes each of which has its own investment goal. Generally, the underlying SEI funds of SMGAX consist of equity funds, bond and money market funds, and real estate funds.
SEI Asset Allocation Trust Conservative Strategy Allocation Fund has three-year annualized returns of 3.3%. SMGAX has an expense ratio of 0.35% compared with the category average of 0.84%.
AB Bond Fund, Inc. - AB Municipal Bond Inflation Strategy invests most of its net assets in investment-grade, fixed-income municipal securities that pay interest exempt from federal taxation. AUNAX advisors also invest in below-investment-grade, fixed-income securities, otherwise known as junk bonds.
AB Bond Fund, Inc. - AB Municipal Bond Inflation Strategy has three-year annualized returns of 2.2%.Terrance T. Hults has been one of the fund managers of AUNAX since December 2010.
To view the Zacks Rank and the past performance of all municipal bond funds, investors can click here to see the complete list of municipal bond funds.
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