General Municipal Debt
  • General municipal debt no load mutual funds are popular because of the tax exemptions these funds can offer
  • Municipal debt involves less risk usually than stocks or other investments
  • No load index funds follow a specific index when setting up and managing the fund portfolio

General municipal debt no load mutual funds and no load index funds can be terrific investment opportunities for investors who are looking for mutual funds that offer wide benefits and are easy to understand. General municipal debt funds invest most of their investment pool in general municipal bonds. These bonds represent municipal debt securities, and they can be a pretty safe investment with minimal risks of capital losses. Municipal bonds are issued by a number of municipalities, states, cities, and other entities, and the purpose of these bonds is to raise funds for public projects and infrastructure improvements that benefit the public. No load index funds are mutual funds that have portfolios which are built to match a specific market index, like the S&P 500 index. Index funds are passively managed rather than aggressively managed, and they involve lower management expenses as a result. General municipal debt funds are considered a safe investment choice, because most municipalities will never default on the bonds issued. Unlike companies, municipalities are governing bodies, such as states, cities, counties, and others. This makes these funds very low risk, with almost no volatility that can be present on the stock market or other investments.

General municipal debt no load mutual funds are a financially smart choice because the funds are no load. Load fees can substantially reduce your investment capital, and there is no proof that load funds are a better investment choice. With load funds, you pay a load fee and in exchange get professional investment advice from a broker or financial advisor concerning the best municipal debt funds for your investment needs and goals. This is no guarantee that the funds you are directed to are actually best for you, because some brokers and advisors may receive a commission or bonus from the specific fund as well, for directing new investors to the fund. This may result in you being directed to a fund that offers the highest commissions to the broker, but it may not be the best fund for your investment goals and strategies. No load funds do not involve this conflict, because you are the one who does the research and fund comparisons, and you make all of the investment decisions concerning the best funds for your capital. No load funds are the best way to go if you are comfortable making all of your own investment decisions, and if you are willing to learn the aspects that you do not know or are unfamiliar with.

Investing in municipal debt has become very popular, in large part because these investments are tax exempt from federal and possibly state taxes. Another reason that general municipal debt mutual funds are a good choice for some investors is that the portfolio of these funds are normally very diverse, so that losses are hedged. A diverse portfolio means that even if one area is slow or experiencing lowered returns, other areas of the portfolio will usually pick up the slack so that the portfolio does not experience losses. The ups and downs even out with diverse investments across a wide variety of municipal debt securities. General municipal debt funds may invest in all ranges and ratings of municipal bonds, and these investments are considered extremely safe when the ratings for the bond investments are high. Municipal bonds can be rated from high quality to junk, and the returns seen with each rating will reflect the risks involved. Junk municipal bonds will earn higher returns than investor class municipal bonds, but they will also carry more risks for losses and defaults at the same time.