Municipal Debt

  • Municipal debt can offer many tax advantages to investors, and this can include federal, state, and local taxes
  • Municipal bond debt is a safer and less risky way to invest than many other investment options
  • Investing in total municipal debt mutual funds can help improve the performance of your investment capital, because the returns can be reinvested without deducting any amount for certain taxes

Arizona municipal debt no load funds are ideal for Arizona investors, because these funds offer double and triple the tax exemptions for residents that investing in other municipal bond debt may offer. Arizona municipal debt funds invest most of their fund pool in municipal bonds and securities which are not taxable in the state of Arizona. This can include state municipal debt or city municipal debt, as long as the city is located in Arizona. Investing in total municipal debt is what these funds do, so that the only investments held are those which offer tax advantages to investors in Arizona. These tax exemptions mean that any profits on these investments are not taxed at a federal or state level, and may not be taxed on the local level as well. These tax benefits can really improve the value and performance of your investments, because the returns can be reinvested instead of being used to pay taxes. There are a number of mutual funds that are available to choose from if you reside in Arizona and want to invest in municipal bond debt for the tax benefits.

Municipal debt is debt that is incurred by cities, states, or other municipal entities, and this debt is incurred to provide the funds needed for public projects and infrastructure building and repairs. Because the total municipal debt is secured by the issuing municipality it involves fewer default risks. It is very rare for a city or town to declare bankruptcy or default on this debt, and even rarer for a state to do so. This makes municipal bonds and other debt securities very low risk. This does not mean that there are no risks at all, because in rare occurrences it is possible to see losses on municipal debt, but it is still far safer than other investment methods like the stock market. Choosing no load funds is another way to maximize the return potential for your investments. No load funds do not charge high load fees, which can be around seven or eight percent, and sometimes even more. These load fees are basically sales commissions for the broker or financial advisor who gives you advice on which funds to invest in. Load fees are no guarantee that you will get the best possible advice, because the broker will receive a commission even if you lose all of your investment capital. For most investors it is a better idea to make your own investment decisions on which municipal debt mutual funds to invest in. Do some research and compare funds on your own, and you will make the best possible investment decisions for your capital, as long as you feel comfortable doing this.

One Arizona municipal debt no load fund that can be a wise investment choice is the JPMorgan AZ Municipal Bond Select, which trades under the symbol OGAFX. This mutual fund has over ninety five million dollars in assets, with a yield that is normally more than three and a half percent. This fund has a five star rating by Morningstar, making it very attractive. This municipal bond debt fund invests in only high quality municipal debt, with no junk bond or lower quality bonds being included in this fund portfolio. Kim Bingle has been the manager of this fund for around three years, and this fund holds on to municipal debt securities for between three and fifteen years normally. The JPMorgan AZ Municipal Bond Select mutual fund is a true no load fund, with no load charges at either end and also no 12b-1 marketing fees. The expense ratio for this fund is point six three, making it one of the moderate funds when it comes to operating expenses, but it is still one of the municipal debt funds with lower fund expense ratios.

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