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The best of all worlds

Q

Is there such a thing as a fixed-duration, long-term Florida municipal bond fund that would return all capital at the end of the fund life despite intermediate fluctuations in NAV?

B.G., Florida

A

James A. Klotz responds:

You’re describing the perfect income security, and yes, it does exist. It’s an individual tax-free bond.

As we’ve always pointed out, one of the disadvantages of owning a bond fund is it does not have a specific maturity date. If it did, there would be no rationale for the substantial sales charges and ongoing management fees.

Sep 8, 2005

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