Muni Fund

Muni Fund – a Muni fund is a mutual fund who strictly invests in municipal bonds.  Muni funds are usually traded by people with in the higher tax bracket because these funds are except from federal taxes... Sometimes even escape state taxes as well.  The risk in investing in Muni fund is sometime a municipality declares bankruptcy which makes them more risky then US government bonds... On the positive side,  the underlying securities of a muni fund is backed by the government  thus giving it a high credit rating, making it more desirable for investors