Municipal Bond Forum

Home > Municipal Bond Forum > Other Topics > The fees in funds

The fees in funds


I am 70 years old and over funded in my IRA. I’m still working and have no need to touch my investments. Nevertheless, I am required to withdraw about $250,000 (minimum) this year. I believe I would do best in a tax-free mutual bond fund since the cost of buying such a small amount of bonds would be higher than if I were buying them in a fund. Am I correct?

S.M., New York


James A. Klotz responds:

Actually, it’s just the opposite.

Most load funds have a sales charge of at least 4%. No-load funds charge ongoing management fees, which take their toll year after year.

We are also troubled by the fact that bond funds have no specific maturity date. This can make them more volatile than individual bonds.

Additionally, with $250,000 to invest, you should be able to do much better on all counts.

Jan 3, 2005

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.

     The responses provided in this forum are meant to address specific questions posed by investors about their municipal bonds and to provide market insight for our general audience. Please note, your investments, objectives, results and experience may differ significantly. Our answers and any potential strategies discussed should not be construed as a solicitation to buy nor sell any security or investment product. All investing entails risk