municipal bond fund

Definition

A mutual fund which invests in municipal bonds. These bond funds are popular among investors in high income tax brackets because they are exempt from federal taxes and, in some cases, from state taxes as well. As with U.S. government bond funds, the underlying securities in municipal bond funds are backed by the government and thus are considered to have a high credit rating. However, municipalities have been known to declare bankruptcy on occasion, making these funds more risky than U.S. government bonds. also called muni fund.

Use municipal bond fund in a sentence

You may want to try and get in on a municipal bond fund if you want to get a nice low risk investment.

​ Was this Helpful? YES  NO 3 people found this helpful.

Zane knew that the municipal bond fund was his best hope at securing a large return while also shielding himself from the taxes normally taken out.

​ Was this Helpful? YES  NO 11 people found this helpful.

For tax considerations, my financial advisor suggested that I put part of my investments into a municipal bond fund because those would not be subject to income taxes.

​ Was this Helpful? YES  NO 5 people found this helpful.

Show more usage examples...

Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
municipal bond arbitrage municipal bond index