This Muni Fund Covers All the Bases

Mutual Funds

This Muni Fund Covers All the Bases

With 910 bonds in its portfolio, this fund is in the black.

Municipal bonds have proved to be a good place to take cover in turbulent markets. Year-to-date through February 6, Fidelity Intermediate Municipal Income (symbol FLTMX gained 3.1%, and it's the only fund in the Kiplinger 25 with a positive one-year return.

Intermediate Muni Income, steered by Mark Sommer, is sticking with high-quality bonds. At last report, more than 80% of the fund's 910-bond portfolio was in debt rated single-A or higher. Sommer has a fondness for tobacco-settlement bonds, state and local government-backed issues, essential-service (such as water and education) and health-care bonds. The fund, whose average maturity is a bit less than eight years, yields 3.2%. That's equivalent to 5% for taxpayers in the 35% federal tax bracket.

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