High Yield Municipal
  • High yield municipal no load funds offer tax advantages that other funds can not, including both state and federal taxes normally
  • High yield municipal funds invest in municipal bonds, which are issued by many different state and city governments and local entities
  • High yield municipal bond funds that are also no load funds can save you a substantial amount in load fees, which are paid to a broker and taken from your investment capital

High yield municipal no load funds are investments that can have a lot to offer for a large number of investors. These high yield municipal funds invest in municipal bonds that offer a higher yield than many other bond or no load index funds. The first step to understanding these no load mutual funds is to understand what municipal bonds are and how they work. Municipal bonds are bonds that are issued by a municipality, such as a state, county, city, or local governments, and these bonds are issued to raise the money needed for public projects, including schools, roads, and other infrastructure needs for the benefit of the municipality population. High yield municipal bond funds offer a better yield than some other bond funds, and there are the tax benefits to consider as well. Many municipal bonds are exempt from taxes, at both the federal and the state level. This means any yield can be reinvested or withdrawn with no tax consequences. High yield municipal securities offer a better yield because the debt is a lower quality and may have a bigger risk of default included. Because of these factors these bonds and no load mutual funds pay a better yield, to attract investors despite the larger risks. Even with high yield bond securities the risk of default is still small, because it is rare for a municipality to be unable to pay a debt.

Most high yield municipal funds can be considered a good investment by many, but this is no substitute for research and fund comparisons. A no load mutual fund investment can save you a substantial amount of money and help increase the yield you see by eliminating load fees. Load fees are generally used as sales commissions, and when you invest in a load fund you may end up giving the broker or financial advisor up to eight percent or more of your investment capital. This fee deducts from the amount of capital you invest, which will mean lower yields in the future. The load fee is paid for investment advice received, but if you are comfortable doing some research and investigating different funds you can make your on investment decisions and choose no load high yield municipal funds instead. This means that all of your capital will start earning for you, and not just the portion of capital left after the load fees are paid. Some brokers may even receive a payment from the funds that they direct you too, making this a conflict of interest, and leaving you without good solid investment advice but still paying an outrageous amount in load fees anyway.

High yield municipal bond funds offer a number of benefits and advantages. Even though these funds are considered more risky, the odds of default are still low. Many tax exempt high yield municipal bond issuers do not apply for and pay for a rating, for a number of reasons. One is that the issuer may not borrow frequently, and another is that the issuer is a small municipality. Even though these issuers may not have a rating, they can still be a great investment because the risk of default is still low and there is not any market volatility. There are tax benefits as well, although if you live in one state and invest in a municipality from another state then taxes may be owed on that portion of your investment. High yield municipal funds can help you increase your yield from the investment without significantly raising the risks involved by a large amount. Choosing no load high yield municipal bond funds can save you a nice chunk of capital because there are no load fees to pay to the broker or financial advisor.