Municipal Bond Forum

Home > Municipal Bond Forum > Muni bond funds vs. individual bonds

Muni bond funds vs. individual bonds


What are the pros and cons of muni investment using mutual funds vs. individual issues?



James A. Klotz responds:

We invariably prefer individual bonds over municipal bond funds if an investor has the wherewithal to provide adequate diversification.

A bond fund has no maturity date, which means there is no promise to return principal as there is with individual bonds.

Individual bonds have a fixed income rate, which is unaffected by declining interest rates.

Open end muni funds can reduce dividend payments in a declining interest rate environment.

Additionally, individual bonds have no ongoing fees, as do most bond funds.

Nov 18, 2019

Start here.

Do you have specific criteria for bonds you’re looking for? Let us know and we’ll e-mail you bonds that fit your needs. There is no charge for this service.

    This report is produced solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. This report is based on information obtained from sources believed to be reliable but no independent verification has been made, nor is its accuracy or completeness guaranteed.