Municipal Bond Medalist Funds

Municipal bonds are best thought of as a loan that various state and local governments have taken out with investors to fund public projects. Investors buy the bonds anticipating an interest payment and ultimate payback of the amount borrowed from revenue generated from the project, such as taxes, fees, tools, or special assessments. The income from these bonds is generally free from federal taxes. To lower risk, these portfolios spread their assets across many states and sectors. Here we highlight the funds and ETFs across the municipal bond categories that also received a Gold, Silver, or Bronze Medalist Rating by our analysts. The Morningstar Medalist Rating is the forward-looking assessment of an investment strategy. The rating is on a five-tier scale running from Gold to Negative. For actively managed funds, Morningstar assigns Gold, Silver, and Bronze ratings to vehicles expected to add value over the long term when compared with a relevant Morningstar Category index after accounting for fees and risk. For passive strategies, funds and ETFs with the top ratings are expected to deliver alpha that exceeds the lesser of the category median net alpha, or zero, over the long term.