Best Muni Bond FundsMunicipal bond funds are investing mainly in tax free municipal bonds issued by various U.S. municipalities such as state of California, state of Texas, Los Angeles city, New York City, and more. The interests are exempt from federal income tax, it may also exempt from state and local tax. You can buy these bond funds from your brokerage such as Vanguard, Fidelity, TD Ameritrade, ETrade, etc.
There are 2 types of municipal bond funds: investment grade muni bond funds, & high yield municipal bond funds. This article will look into top investment grade muni bond ETFs. These bond ETFs are traded like stocks or closed end funds.
These top diversified municipal funds are selected based on its YTD performance in 2014. Unlike mutual fund, these exchange traded funds don’t have a sales load or a transaction fee. You can find the fund review and other fund information below such as the yield, expense ratio, fund manager, top holdings, top sectors, etc.
Top municipal bond ETFs 2014 are:
- Market Vectors CEF Municipal Income ETF
- Market Vectors-Long Municipal Index ETF
- PowerShares National AMT-Free Municipal Bond ETF
- db X-trackers Municipal Infrastructure Revenue Bond Fund
- Market Vectors-Intermediate Municipal Index ETF
- SPDR Barclays Municipal Bond
- iShares National AMT-Free Muni Bond ETF
- PIMCO Intermediate Municipal Bond Strategy Fund
- Columbia Intermediate Municipal Bond ETF
- Market Vectors Pre-Refunded Municipal Index ETF
- Market Vectors Short Municipal Index ETF
- SPDR Barclays Short Term Municipal Bond ETF
- PIMCO Short Term Municipal Bond Strategy Fund
- iShares Short-Term National AMT-Free Muni Bond ETF
- VRDO Tax Free Weekly Portfolio
- SPDR S&P VRDO Municipal Bond ETF
Market Vectors CEF Municipal Income ETF (XMPT)Market Vectors CEF Municipal Income ETF uses its assets to buy portfolio of municipal CEFs (closed end funds) that may produce yields higher than most other fixed income investments. The management fee is currently 0.40%. The net expense ratio is 1.65%. The current distribution yield is 5.65%.
More: Best Municipal Bond Mutual Funds for 2014
This top municipal bond ETF has YTD return of 12.99% in 2014. The average 3 year return is 6.85%. Top 3 holdings are Nuveen Municipal Value Fund (NUV), Nuveen Insured Municipal Opportunity Fund (NIO), and Blackrock Municipal Target Term Trust (BTT).
PowerShares National AMT-Free Municipal Bond ETF (PZA)PowerShares National AMT-Free Municipal Bond ETF has a high yield of 4.18%. With $660 million of assets, this muni bond fund has expense fee of 0.28%. This index ETF has share price of $24.85. It invests majority of assets in investment grade municipal bonds issued by US States and territories.
Morningstar has ranked this best muni bond ETF with 4 stars rating. In 2014, its year to date return is 9.85%. Top 5 debt sectors are water & sewer, transportation, state & local general obligation, health, and education.
SPDR Nuveen Barclays Capital Municipal Bond ETF (TFI)SPDR Nuveen Barclays Capital Municipal Bond ETF is tracking the Barclays Municipal Managed Money Index. You can buy this fixed income fund through your stock brokerage. The fund CUSIP is 78464A458. Its expense fee is 0.23%. SSgA Funds Management Inc is the investment manager.
This top municipal bond ETF has returned 6.41% over the past 1 year, 5.01% over the past 3 year, and 5.36% over the past 5 year.
iShares National AMT-Free Muni Bond ETF (MUB)iShares National AMT-Free Muni Bond ETF tracks index composed of investment-grade U.S. municipal bonds. This municipal bond ETF has total assets of $3.3 billion. Its expense fee is only 0.25%. It has 1 year total return of 8.67%. This best ETF is ranked with 4 stars rating by Morningstar.
PIMCO Intermediate Municipal Bond Fund (MUNI)PIMCO Intermediate Municipal Bond Fund is an active ETF managed by Joseph Deane. This tax free bond fund utilizes its assets to purchase a diversified portfolio of primarily intermediate duration, high credit quality bonds, which carry interest income. The fund’s CUSIP is 72201R866. The SEC 30 day yield is 1.35%.
|1||Market Vectors CEF Municipal Income ETF||XMPT||$25.70||$34,614||12.98%|
|2||Market Vectors-Long Municipal Index ETF||MLN||$19.26||$79,763||12.08%|
|3||National AMT-Free Municipal Bond Portfolio||PZA||$24.85||$658,155||10.97%|
|4||db X-trackers Municipal Infrastructure Revenue Bond Fund||RVNU||$25.01||$16,283||9.47%|
|5||Market Vectors-Intermediate Municipal Index ETF||ITM||$23.35||$689,384||7.45%|
|6||SPDR Barclays Municipal Bond||TFI||$23.76||$1,041,612||6.44%|
|7||iShares National AMT-Free Muni Bond ETF||MUB||$109.07||$3,362,229||6.40%|
|8||Intermediate Municipal Bond Strategy Fund||MUNI||$53.47||$211,147||4.26%|
|9||Intermediate Municipal Bond ETF||GMMB||$53.33||$5,347||4.23%|
|10||Market Vectors Pre-Refunded Municipal Index ETF||PRB||$24.59||$34,552||0.97%|
|11||Market Vectors Short Municipal Index ETF||SMB||$17.63||$245,799||0.91%|
|12||SPDR Barclays Short Term Municipal Bond ETF||SHM||$24.39||$2,327,911||0.80%|
|13||Short Term Municipal Bond Strategy Fund||SMMU||$50.45||$76,225||0.73%|
|14||Short-Term National AMT-Free Muni Bond ETF||SUB||$106.32||$881,460||0.43%|
|15||VRDO Tax Free Weekly Portfolio||PVI||$24.96||$149,820||-0.08%|
|16||SPDR S&P VRDO Municipal Bond ETF||VRD||$29.89||$5,996||-0.17%|