Investing in municipal bond funds gives investors a high level of diversification in a single investment. However, investing in a portfolio of funds gives no guarantee that the entire principal amount will be available at a specific maturity date. One can overcome this by investing in muni target maturity funds and ETFs. Such funds and ETFs invest in bonds from U.S. state and local governments that are expected to mature in the same year. Another benefit of these funds is that their income is generally free from federal taxes. Let’s take a look at the top ten muni target maturity funds (and ETFs).
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Top Ten Muni Target Maturity Funds
We have used the past one year return numbers (from money.usnews.com) to come up with the top ten muni target maturity funds. We have considered both mutual funds and ETFs for our list. Following are the top ten muni target maturity funds:
Invesco BulletShares 2023 Municipal Bond ETF (NASDAQ:BSMN) tracks the performance of the Invesco BulletShares® Municipal Bond 2023 Index, which measures the performance of municipal bonds with maturities (or effective maturities) in the year 2023. It has returned 0.45% YTD. BSMN has over $38 million in total assets. Its top two holdings are: LOS ANGELES CALIF DEPT WTR & PWR REV 5% and CALIFORNIA ST DEPT WTR RES CENT VY PROJ REV 5%.
Invesco BulletShares 2024 Municipal Bond ETF (NASDAQ:BSMO) tracks the performance of the Invesco BulletShares® Municipal Bond 2024 Index, which measures the performance of municipal bonds with maturities (or effective maturities) in the year 2024. It has returned 0.54% YTD. BSMO has over $38 million in total assets. Its top two holdings are: DALLAS FORT WORTH TEX INTL ARPT REV 5% and NEW YORK ST DORM AUTH REVS NON ST SUPPORTED DEBT 5%.
Invesco BulletShares 2025 Municipal Bond ETF (NASDAQ:BSMP) tracks the performance of the Invesco BulletShares® Municipal Bond 2025 Index, which measures the performance of municipal bonds with maturities (or effective maturities) in the year 2025. It has returned 0.59% YTD. BSMP has over $41 million in total assets. Its top two holdings are: PENNSYLVANIA ST 5% and SALT RIV PROJ AGRIC IMPT & PWR DIST ARIZ ELEC SYS REV 5%.
Invesco BulletShares 2026 Municipal Bond ETF (NASDAQ:BSMQ) tracks the performance of the Invesco BulletShares® Municipal Bond 2026 Index, which measures the performance of municipal bonds with maturities (or effective maturities) in the year 2026. It has returned almost 1% YTD. BSMQ has over $25 million in total assets. Its top two holdings are: CALIFORNIA ST 5% and NEW YORK N Y CITY MUN WTR FIN AUTH WTR & SWR SYS REV 5%.
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Fidelity Advisor® Municipal Income 2023 Fund (FSODX, 1.19%)
Fidelity Advisor® Municipal Income 2023 Fund (MUTF:FSODX) normally invests more than a quarter of its total assets in municipal securities that finance similar types of projects. It has returned 0.21% in the last six months and over 2.80% in the past three years. FSODX has over $45 million in total assets. Its top two holdings are: ILLINOIS ST SALES TAX REV 5% and DALLAS TEX INDPT SCH DIST 4%.
Invesco BulletShares 2027 Municipal Bond ETF (NASDAQ:BSMR) tracks the performance of the Invesco BulletShares® Municipal Bond 2027 Index, which measures the performance of municipal bonds with maturities (or effective maturities) in the year 2027. It has returned over 1% YTD. BSMR has over $18 million in total assets. Its top two holdings are: WASHINGTON D C MET AREA TRAN AUTH GROSS REV 5% and GEORGIA ST 5%.
Invesco BulletShares 2029 Municipal Bond ETF (NASDAQ:BSMT) tracks the performance of the Invesco BulletShares® Municipal Bond 2029 Index, which measures the performance of municipal bonds with maturities (or effective maturities) in the year 2029. It has returned over 1.20% YTD. BSMT has over $15 million in total assets. Its top two holdings are: NEW YORK ST DORM AUTH REVS NON ST SUPPORTED DEBT 5% and ILLINOIS ST TOLL HWY AUTH TOLL HIGHWAY REV 5%.
Invesco BulletShares 2030 Municipal Bond ETF (NASDAQ:BSMU) tracks the performance of the Invesco BulletShares® Municipal Bond 2030 Index, which measures the performance of investment-grade municipal bonds with maturities (or effective maturities) in the year 2030. It has returned over 1.30% YTD. BSMU has over $10 million in total assets. Its top two holdings are: WASHINGTON D C MET AREA TRAN AUTH DEDICATED REV 5% and NEW YORK N Y CITY TRANSITIONAL FIN AUTH REV 5%.
Invesco BulletShares 2028 Municipal Bond ETF (NASDAQ:BSMS) tracks the performance of the Invesco BulletShares® Municipal Bond 2028 Index, which invests in municipal bonds with maturities (or effective maturities) in 2028. It has returned over 1.4% YTD. BSMS has over $18 million in total assets. Its top two holdings are: NEW YORK ST DORM AUTH SALES TAX REV ST SUPPORTED DEBT 5% and TEXAS MUN GAS ACQUISITION & SUPPLY CORP III GAS SUPPLY REV 5%.
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Fidelity® Municipal Inc 2025 Fd (FAMHX, 2.74%)
Fidelity Advisor® Municipal Income 2025 Fund (MUTF:FAMHX) usually invests in investment-grade municipal securities, whose interest is exempt from federal income tax, but may be subject to the federal alternative minimum tax. It has returned almost 1% in the last six months and over 4% in the past three years. FAMHX has over $27 million in total assets. Its top two holdings are: CONNECTICUT ST HSG FIN AUTH HSG MTG FIN PROG 5% and MASSACHUSETTS ST DEV FIN AGY REV 5%.
