Mutual Fund News

Wall Street Journal Fund Fiend Municipal Bond mutual fund article analysis

Morningstar municipal bond fund screener

A recent Fund Fiend article from the Wall Street Journal mentioned 4 different municipal bond mutual funds. We figured it was time to take a look at these funds and see if they deserve consideration for our portfolio. This article was interesting because it looked at how tax-free municipal bond funds whether the choppy waters since November 1, 2010.

The Eaton Vance mutual fund charges of 4.75% load, while the J.P. Morgan fund charges a 3.75% load. These are nonstarters in our book especially in the bond mutual fund area, where funds have to scrape to get a small advantage.

The Marshall intermediate tax-free fund this rated 5 star by Morningstar, charges 0.55%, has a 3.52% yield, average duration of 5.47 years, average maturity of 7 years, and in average credit quality of A. This is reasonable mutual funds although it’s duration is longer than our goal of around 3 years, and it’s credit quality isn’t our preferred AA.

The T. Rowe Price Summit municipal intermediate mutual fund is rated four-star by Morningstar, charges are reasonable 0.50%,has a 3.43% yield, average duration of 4.92 years, average maturity of 9 years, and average credit quality of A. This fund is very similar to the Marshall fund.

Here is a graph showing the performance of these 2 funds against Fidelity’s FSTFX and Vanguard’s VMLTX that we prefer. As you can see, with longer maturities you will see more turbulence.

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