California Tax Free Municipal Bond Funds

Treasury bonds are generally considered the safest form of bond investment, but they generally do not offer the same rate of return as municipal bonds and do not have the same tax advantages as city bonds. So this is a short and easy summary about California tax free municipal bond funds.

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What is a Municipal bonds?

Municipal bonds are debt instruments issued by states or municipalities that allow them to borrow money for a specific purpose. The funds raised through the sale of bonds could be used to build roads or improve infrastructure, build schools or support projects that are beneficial to the community, such as hospitals or health centers. The failure of city bonds can only occur rarely. The breach of the bond occurs when the issuer of the bond does not pay interest or capital within a specific period.


Alternatives to bond funds

As a city bond investor, there are several ways you can invest. You can:

  • Buy bonuses alone,
  • Investment by bond fund managed by a mutual fund company
  • Buy ETF or city bonds
  • Invest in unit investment funds.


Municipal bond funds

Most mutual fund companies offer bond funds and mutual funds that focus on equity groups or indices. Negotiating bonds in or out of the fund’s portfolio depending on market conditions or price direction.  Or even according to risk changes. Passive funds are also available and generally require a bond index. Many funds provide city bonds through joint funds of classification funds and general risk profiles for the funds.  As well as a projected return, but because the bonds held by the fund can change and change frequently it can.

It won’t be difficult to find out exactly what you are buying.  Or if the bonds you had when you buy shares are still part of the portfolio. The city’s bond funds can be end funds or end funds and trade closed funds as shares through any brokerage account. The widespread availability of bond funds through IRA.  Or 401 (k) accounts helps boost the popularity of mutual bond funds.


The best tax-free municipal bond funds:


  • California Bond USAA:

USCBX invests a large proportion of its assets in securities issued by the state of California.  That are expected to pay interest income free of federal income tax and California state income tax. USCBX focuses on obtaining long-term values. So USCBX is expected to maintain a dollar-weighted average of more than 10 years. The USA California Bond fund has an annualized yield of 2.3 percent.


  • Nuveen CA High Yield Municipal Bond Fund

The current high-income investment seeks the exemption of regular federal income, from the state of California and in some cases from local California income. The overall result is secondary. Under normal market conditions, the fund invests at least 80 percent of the amount of net assets and the amount of any loan for investment purposes in municipal bonds that pay interest exempt from federal and regular income tax from California. These municipal bonds include obligations issued by the State of California and its divisions, its authorities, instruments and corporations, as well as obligations issued by territories of the United States


  • Rowe Price California Tax-Free Bd FD

The investment seeks to provide the highest level of federal and state income tax-exempt income in California, in line with prudent portfolio management, investing primarily in municipal investment grade bonds. The fund will invest to make, under normal market conditions, at least 80 percent of its net assets (including loans for investment purposes) invested in bonds that pay interest exempt from California federal and state income taxes, and 80 percent if the fund’s income is expected to be exempt from California federal and state taxes.


Before you go, I hope this article California tax free municipal bond funds is helpful for you. If you have other suggestions put it in the comments below.


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