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Tax-Exempt Income Portfolio

5/2016 from Income Investing

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Tax-Exempt Income Portfolio

For when taxes really matter.
 100% Bonds | 


 Data through January 31, 2020

FUND NAME SYMBOL % OF
PORTFOLIO
YTD
RETURN
1-YR
RETURN
3-YR
RETURN
5-YR
RETURN
10-YR
RETURN
MAX LOAD EXPENSE RATIO
BondBaird Intermediate Municipal Bond InvestorBMBSX15%1.37%5.9%3.3%2.04%2.71%none%0.55%
BondFidelity Intmed Muni IncomeFLTMX151.67.394.462.873.59none0.37
BondT. Rowe Price Tax-Free Short-IntermediatePRFSX150.844.022.291.451.89none0.52
BondSchwab Tax-Free BondSWNTX151.67.484.282.773.82none0.49
BondUSAA Tax Exempt Long-TermUSTEX6.251.99.015.183.614.97none0.48
BondVanguard California Long-Term Tax-Ex InvVCITX6.251.9910.035.794.035.24none0.17
BondVanguard Long-Term Tax-ExemptVWLTX6.252.019.875.794.064.95none0.17
BondWells Fargo Municipal Bond AWMFAX6.251.798.45.483.735.164.500.75
BondMarket Vectors Lehman AMT-Free Shrt MuniSMB150.794.222.441.561.87none0.2
   1001.426.693.92.573.35 0.42
** Closed to new investors. # Closed to new investors; other share classes are available.
r Maximum redemption fee charged when you sell shares. s Front-end load; redemption fee may apply.
— Fund has not existed for the specified time. Source: Morningstar, Inc..

If you're in the maximum federal income-tax bracket, municipal bonds are a no-brainer. A yield of 2.3% in tax-exempt interest beats a 4% in taxable interest for someone who faces the top federal rate of 43.4%.

But lower-income taxpayers should consider munis, too — they're sound, poular investments with excellent vital signs.

Our portfolio has a mix of 30% short-term funds, 45% intermediate-term bonds, and 25% long-term. We steer clear of "junk" munis.