This low-cost municipal bond fund seeks to provide federally tax-exempt income and typically appeals to investors in higher tax brackets. The fund holds high-quality long-term municipal bonds with an average duration of approximately 6–10 years, making its share price considerably more susceptible to interest rate changes than funds with shorter average durations. Investors who are looking for a fund that may provide federal tax-exempt interest income and can tolerate interest rate risk may wish to consider this fund as a complement to an already diversified fixed income portfolio.
If you work at a company providing a 401(k) plan, it behooves you to understand your fund options. Most plans offer three types of investment alternatives: target-date mutual funds, actively managed mutual funds and index funds.
