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