Municipal Bond Forum
Comparing bond funds
Q
Please compare these two funds, Federated Municipal Securities A and Columbia Municipal Income Fund Z. In today’s market, which one would be more favorable and why?
A
James A. Klotz responds:
We rarely recommend bond funds to an investor who has the wherewithal to diversify adequately utilizing individual bonds. The charges and fees associated with bond funds force investors to sacrifice too great a percentage of their return. Municipal bond funds can have substantial front-end loads (4.50 to 4.75%) as well as ongoing management fees.
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