5 Highest Yielding Zacks #1 Ranked Municipal Bond Mutual Funds - Best of Funds

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Municipal bonds offers several distinctive advantages to investors, the most important of which is that interest earned from them is exempt from federal income tax. They also show very little correlation with returns from equity investments. Thus, they offer relatively high yields at lower levels of risk and are considered second only to government securities in terms of safety of capital invested. While most asset classes fared badly, this particular category was up for the year and performed favorably in the month of May. By holding a well-diversified portfolio of such securities, mutual funds significantly lower the associated default risk.

Below we will share with you the 5 highest yielding Zacks #1 ranked municipal bond mutual funds. Each has earned a Zacks #1 Rank (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.

Mutual Fund Sec 30 Day Yield
Capital Group Core Municipal 2.00%
Pioneer AMT-Free Municipal A 1.62%
Oppenheimer Rochester Short Term Municipal A 1.53%
SEI Tax-Exempt Short Duration Municipal A 1.20%
MFS Municipal Limited Maturity A 1.04%

Capital Group Core Municipal (CCMPX) seeks high current income not subject to federal income taxes. The fund primarily invests in municipal bonds with intermediate maturity periods. These bonds must have a minimum quality rating of A-. The municipal bond mutual fund returned -0.20% in the last one year period.

The Fund Manager is Neil L. Langberg and he has managed this municipal bond mutual fund since 2010.

Pioneer AMT-Free Municipal A (PBMFX) invests the majority of its assets in municipal bonds rated investment grade. These bonds must have a maturity period exceeding one year. A maximum of 10% of its assets must be invested in junk bonds. The municipal bond mutual fund returned -3.34% in the last one year period.

As of July 2013, this municipal bond mutual fund held 239 issues, with 1.78% of its total assets invested in Public Auth 6.5%.

Oppenheimer Rochester Short Term Municipal A (ORSTX) seeks a high level of current income which is not subject to federal income taxes. The fund invests a large share of its assets in municipal bonds. A maximum of 5% of its assets is invested in junk bonds. The municipal bond mutual fund returned 1.50% in the last one year period.

The municipal bond mutual fund has a minimum initial investment of $1,000 and an expense ratio of 0.80% compared to a category average of 0.70%.

SEI Tax-Exempt Short Duration Municipal A (SUMAX) invests the majority of its assets in municipal bonds rated investment grade. The interest from these bonds must not be subject to federal income tax. The municipal bond mutual fund returned 0.28% in the last one year period.

The Fund Manager is William J. Furrer and he has managed this municipal bond mutual fund since 2011.

MFS Municipal Limited Maturity A (MTLFX) seeks high current income. The fund invests a large share of its assets in municipal bonds not subject to federal alternative minimum tax. The average effective maturity period of its portfolio is usually five years or lower. The municipal bond mutual fund returned 8.46% in the last one year period.

The municipal bond mutual fund has a minimum initial investment of $1,000 and an expense ratio of 0.70% compared to a category average of 0.70%.

To view the Zacks Rank and past performance of all municipal bond funds, investors can click here to see the complete list of funds.

About Zacks Mutual Fund Rank

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank.


View All Zacks #1 Ranked Mutual Funds

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Mutual Funds


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