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Muni MM vs Muni Bond Fund shrink rap  09-24-2008, 10:59 PM | Post #2566342
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Slight change of focus, but I have been struck the past several days that the 7-day Yield on FIMMX  (AMT Free MMF) when adjusted for a 28% income tax rate is now yielding a 6.02%  tax equivalent yield while the dividend on FTABX (Natl Muni Bond Fund (AMT Free) is at 6.6% Tax equivalent yield but declines in NAV value almost everyday.  If one accepts the risk of FIMMX breaking the buck, it seems like that it is a much better option in the current craziness since the principle is implicitly backed by the new  government policies and the yields  are  nearly the same as the more volatile FTABX.

So in our large taxable account I'm wondering if I should move money from FTABX to FIMMX where capital preservation is essentially guaranteed barring major dislocations.  Any thoughts?

Topics bonds interest rate Muni MM Funds Risk View Complete Thread
 
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