If you're evaluating mutual funds for your investment portfolio or retirement account, this list highlights the best municipal bond funds to consider now, based on each fund outperforming the Bloomberg Municipal Bond Index over the last one-, three-, five- and 10-year periods.
Shaded cells indicate the five best-of-the-best funds based on 10-year performance. Of 444 municipal bond funds at least 10 years old, 25 of them, or a little less than 6%, were winners in the IBD 2024 Best Mutual Funds awards.
A municipal bond fund invests in municipal bonds (also known as municipal debt). These bonds are issued by states, municipalities, counties and special-purpose districts to fund capital expenditures. Municipal bond funds have different objectives depending on where they are located, the credit quality of the bonds, and the duration of the bonds. Municipal bonds are exempt from federal income tax and may be exempt from state income tax.
For more details, read about how the best mutual funds deliver benchmark-beating returns, and see the full 2024 list of IBD's Best Mutual Funds in every category, including bond funds, diversified stock funds, blend and index funds, and breakouts of large-cap, midcap and small-cap funds.
All returns are as of Dec. 31, 2023.
Best Municipal Bond Funds
| Fund | Symbol | 1-year total return | 3-year average annual return | 5-year average annual return | 10-year average annual return | Morningstar category | Annual report net expense ratio |
|---|---|---|---|---|---|---|---|
| Benchmark:Bloomberg Municipal TR USD | 6.4% | -0.4% | 2.25% | 3.03% | |||
| Invesco Rochester Municipal Opps A | ORNAX | 8.53 | -0.19 | 3.69 | 5.97 | US Fund High Yield Muni | 1.3% |
| Invesco Rochester New York Municipals A | RMUNX | 9.82 | 0.05 | 3.66 | 5.32 | US Fund Muni New York Long | 1.14 |
| MainStay MacKay High Yield Muncpl Bd I | MMHIX | 9.55 | 0.07 | 2.88 | 5.18 | US Fund High Yield Muni | 0.62 |
| PIMCO High Yield Municipal Bond I | PHMIX | 8.93 | 0 | 3.24 | 4.88 | US Fund High Yield Muni | 0.6 |
| BlackRock High Yield Municipal Instl | MAYHX | 7.1 | -0.34 | 2.63 | 4.77 | US Fund High Yield Muni | 0.65 |
| Delaware National Hi-Yld Muni Bd A | CXHYX | 8.72 | -0.06 | 3.07 | 4.58 | US Fund High Yield Muni | 0.85 |
| Colorado BondShares A Tax-Exempt | HICOX | 7.72 | 2.54 | 3.83 | 4.33 | US Fund Muni Single State Interm | 0.61 |
| American High-Income Municipal Bond A | AMHIX | 7.93 | 0.12 | 2.67 | 4.28 | US Fund High Yield Muni | 0.64 |
| Invesco New Jersey Municipal A | ONJAX | 6.96 | 0.51 | 3.17 | 4.14 | US Fund Muni New Jersey | 1.04 |
| Vanguard High-Yield Tax-Exempt | VWAHX | 8.35 | -0.24 | 2.7 | 3.87 | US Fund Muni National Long | 0.17 |
| Parametric TABS 5 to15 Yr Lad Muni Bd I | EILTX | 7.22 | 0.13 | 2.57 | 3.86 | US Fund Muni National Interm | 0.37 |
| PIMCO Fixed Income SHares TE | FXIEX | 9.74 | 0.62 | 3.43 | 3.74 | US Fund High Yield Muni | 0.07 |
| Vanguard NJ Long-Term Tax-Exempt Inv | VNJTX | 8.01 | -0.05 | 2.9 | 3.74 | US Fund Muni New Jersey | 0.17 |
| PIMCO Municipal Bond Instl | PFMIX | 8.4 | -0.22 | 2.65 | 3.7 | US Fund Muni National Long | 0.47 |
| BNY Mellon Municipal Opportunities M | MOTMX | 7.82 | 0.03 | 2.52 | 3.56 | US Fund Muni National Interm | 0.75 |
| Western Asset Municipal High Income A | STXAX | 7.99 | 0.05 | 2.3 | 3.52 | US Fund High Yield Muni | 0.8 |
| BlackRock NJ Municipal Bond Instl | MANJX | 7.66 | -0.13 | 2.3 | 3.49 | US Fund Muni New Jersey | 0.55 |
| Delaware Tax-Free CA A | DVTAX | 9.15 | -0.13 | 2.47 | 3.47 | US Fund Muni California Long | 0.81 |
| Fidelity Tax-Free Bond | FTABX | 7.51 | -0.28 | 2.49 | 3.36 | US Fund Muni National Long | 0.25 |
| Fidelity New Jersey Municipal Income | FNJHX | 8.08 | 0.16 | 2.79 | 3.35 | US Fund Muni New Jersey | 0.47 |
| Fidelity Municipal Income | FHIGX | 7.13 | -0.34 | 2.36 | 3.27 | US Fund Muni National Long | 0.46 |
| JHancock CA Municipal Bond A | TACAX | 8.22 | 0.45 | 2.46 | 3.27 | US Fund Muni California Long | 0.79 |
| AB Tax-Aware Fixed Income Opps Adv | ATTYX | 6.99 | 0.71 | 3.12 | 3.25 | US Fund High Yield Muni | 0.63 |
| Delaware Tax-Free PA A | DELIX | 8.83 | 0.06 | 2.4 | 3.25 | US Fund Muni Pennsylvania | 0.84 |
| PIMCO NY Municipal Instl | PNYIX | 8.11 | 0.07 | 2.45 | 3.25 | US Fund Muni New York Intermediate | 0.46 |
Sources: IBD, Morningstar Direct
* Fund is closed to new investors
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