Municipal Bond Mutual Fund News

Week 1, 2011 Municipal Bond and Mutual Funds News – Heading off Defaults

municipal bonds

This week’s (January 3-7, 2011) saw life come back into the market after the holidays. Slightly falling prices in Municipal bond Mutual Funds. This week municipal bond news included:

  • Moody’s states that no state will default on rated bond debt this year. 20 more U.S. counties have achieved a ‘AAA’ rating since January 2008. Are they a little optimistic?
  • 1841 saw eight states and Florida default. New taxes the new regulations pulled them out of that hole.
  • Illinois is seeking a income tax increase to help plug their massive $13 billion deficit. Hooray!
  • Others see what we mentioned last year, Municipal bonds fell in tandem with Treasury Bonds. Muni’s day of reckoning hasn’t occurred yet but investor outflows continue.
  • Chowchilla, CA and has defaulted on municipal bonds

California Municipal Bond Mutual fund Movement

Fidelity intermediate term municipal bond fund (FCSTX) 0.05% for the week.
Month to date: 0.05%. December -0.64%. Current Yield 1.74%.

Average maturity 3.3 years. Average duration 3.1 years. Average credit quality AA. Expense ratio 0.35%. Morningstar rating 4 stars.

Vanguard California intermediate term municipal bond fund (VCAIX) -0.18% for the week.
Month to date: -0.18% December -1.69%. Current Yield 3.47%.

Average maturity 6.3 years. Average duration 5.8 years. Average credit quality A. Expense ratio 0.20%. Morningstar rating 4 stars.

See how the Fidelity intermediate term municipal bond fund (FCSTX) and Vanguard California intermediate term municipal bond fund (VCAIX) performed this week on this graph:

See how the Fidelity intermediate term municipal bond fund (FCSTX) and Vanguard California intermediate term municipal bond fund (VCAIX) performed this month on this graph:

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