Municipal Debt
  • Connecticut municipal debt no load index funds follow a certain index concerning the portfolio holdings
  • Municipal bond debt offers unique tax advantages
  • No load bond funds do not charge load fees, which can be as high as eight percent of the investment or redemption amount

Mutual funds have become a very popular way for many to invest, because these funds offer benefits due to the pooled investment capital. Municipal debt no load bond funds are one type of mutual fund that offers some of the best benefits out of all the different investment options. Municipal debt is relatively safe, with few risks of devastating capital losses, because this debt is backed by the issuing municipality. Municipal bond debt helps cities, states, and other municipalities fund needed projects for the population, such as roads, schools, hospitals, police and fire department equipment and improvements, and many other needed improvements for the good of the community. No load bond funds and no load index funds that invest in municipal debt can offer tax exemptions that other mutual funds and investment types can not. Municipal bond debt funds offer tax exemption status on a federal level, and choosing these funds that only invest in municipal debt from the state you reside in can offer tax exemption on state taxes, and possibly even local income taxes as well. These mutual funds offer great advantages to investors who are in higher income brackets, because they offer tax exemptions. This means that any returns can be reinvested and boost the value of the investment. Choosing funds that are no load can save you quite a bit in load fees, because these can usually be between four and eight percent. Front load fees take this amount right off the top of your investment capital before the balance is invested, while back end loads take this percentage from the amount you receive when you sell.

One of the Connecticut municipal debt no load funds that is available and has high reviews is the Eaton Vance CT Municipals I Fund, which trades under the symbol EICTX. This fund offers an asset value of almost one hundred and twenty five million dollars, and does not charge any load fees or 12b-1 marketing fees. The only drawback with this municipal debt no load bond fund is the high initial investment amount, which is a quarter of a million dollars, and that is because this fund is an institutional fund as well. It is aimed at institutional investing instead of personal investing, for institutions in the state of Connecticut. Another municipal bond debt fund that may be right for you is the Columbia CT Intermediate Muni Bd Z, which has the ticker symbol SCTFX. This fund aims to invest in high quality municipal debt securities and has a Morningstar rating of three stars. The minimum investment amount for this specific fund is twenty five hundred dollars, perfect for individual investors. The fund has two hundred and twenty eight million in assets, and has been operating since 2002. Another possibility is the Dreyfus State Muni Bond CT Z, ticker symbol DPMZX. This municipal debt no load mutual fund is not rated by Morningstar, but offers holdings which are exempt from both federal and state taxes to residents of Connecticut.

It is important to understand the difference between no load index funds and no load bond funds when investing, whether it is in municipal debt or some other investment type. No load index funds have a portfolio which is set up to be similar to a specific index, like the S&P 500, and there are many indexes that can be used. These funds are not actively managed but instead are managed passively. No load bond funds on the other hand are managed actively. The difference is that passive management results in less turnover and fund expenses, but it can also mean more losses if the fund does not keep up with the index or the index looses value. Active management with no load bond funds means that holdings are changed frequently, leading to slightly higher fund expenses, but there is a chance for better returns as well.