Intermediate Municipal Fund
  • An intermediate municipal fund is a mutual fund which mainly invests in intermediate municipal debt for the tax exemptions investors enjoy
  • The best no load funds also have low operating expenses and do not charge any marketing fees
  • Municipal debt funds can be ideal for high income investors

No matter what state you live in, an investment in an intermediate municipal fund which invests only in municipal debt in the state you live in will offer many advantages and benefits. Intermediate municipal debt is municipal debt that matures between five and ten years after it is issued, and municipal debt funds have a variety of municipal debt investments which can offer double or even triple tax exemptions for investors in the state. The money used to pay taxes can instead be put back into the mutual fund, to increase the value of your investment. Intermediate municipal debt securities are issued by municipal entities to raise needed revenue, which is then used for the benefit of the public. The best no load funds are not just the ones that do not charge any load fees, they will also have no 12b-1 marketing fees and a lower fund operating expense. With no load funds, research is important. There is no advice given when these funds are invested in, unlike load funds, so it is important that you understand and compare all of the available intermediate municipal mutual funds before deciding which one is right for you.

No matter which intermediate municipal fund you decide on, make sure to examine the quality of municipal debt that the fund invests in. Not all municipal debt funds are the same, and each one carries specific risks and returns. Most investors can research, evaluate, and compare funds without needing any professional assistance. The best no load funds will only invest in the highest quality municipal debt, even though this may mean returns which are slightly lower in exchange for the lower risks. Municipal debt is rated according to quality, and bonds which are rated BBB and above are considered investment grade. Unless you are willing to take higher risks with your investment capital, it may be unwise to invest in any intermediate municipal fund which invests in municipal debt graded any lower than this. This can help protect you against devastating capital losses if a default does occur. Finding the best no load funds that involve intermediate municipal debt from your state can be done by performing a few online searchers. Many online investment websites offer free investment tools, which can be used to locate and compare no load municipal debt funds in your state and city. Choosing the right intermediate municipal fund may take some time and effort, but it is well worth it to ensure that the mutual funds invested in are the right ones for your investment goals and strategies.

Municipal debt funds offer a number of advantages, and most no load versions have low initial investment requirements. Some of these funds can be as low as one hundred dollars or less, unless the fund is an institutional mutual fund. An institutional municipal fund is one that charges operating expenses which are lower, but these funds have a catch as well. The investment amount needed to invest in an institutional fund is extremely high, sometimes in the millions of dollars. These intermediate municipal funds offer institutions the same tax exemptions that individual investors can see from them. The only thing that some experts agree on when it comes to intermediate municipal debt and disadvantages is that municipal debt funds are not well diversified, and a diverse portfolio is considered the golden rule by many investors. This is not an issue with a lot of investors though, because municipal debt is considered relatively safe, and diversifying the portfolio of an intermediate municipal fund may complicate the tax exemptions offered. Intermediate municipal debt offers terrific investment opportunities for many, and should not be overlooked.