Municipal Bond Fund

A mutual fund that invests in municipal bonds, or "munis." Municipal bonds are debt securities issued by a state, municipality, county, or special purpose district (public schools, airports, etc.) to finance capital expenditures. They are exempt from federal tax, and are generally exempt from state taxes for residents of the state in which they are issued.










    

            

            
   
        
        

            
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|||Municipal bonds and bond funds are generally bought for their favorable tax implications and are a popular fixed-income investment  for people in a high income tax bracket. Like all bonds, the municipal variety is subject to an investor's consideration of yield, credit quality and duration.