3 Top-Ranked Municipal Bond Funds to Buy for Stable Income

The debt securities category will always be the first choice for risk-averse investors because this class of instruments provides a regular income at low levels of risk. Income from regular dividends helps to ease the pain caused by plunging stock prices.

When considering the safety of capital invested, municipal bond mutual funds are second only to those investing in government securities. In addition, interest income earned from these securities is exempt from federal taxes and, in many cases, from state taxes.

Below, we share with you three top-ranked municipal bond funds, viz., Colorado BondShares Tax-Exempt HICOX, Eaton Vance Total Return Bond EIBAX and American High-Income Municipal Bond AMHIX. Each has a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of municipal bond funds.

Colorado Bond Shares Tax-Exempt primarily invests in tax-exempt bonds and other tax-exempt securities issued by the State of Colorado and its municipalities, political subdivisions, and public authorities, including tax-exempt notes and municipal leases, with only limited temporary investments.

Colorado Bond Shares Tax-Exempt has three-year annualized returns of 6.3%. As of March 2026, HICOX had 32.5% of its assets invested in Total Misc. Bonds.

Eaton Vance Total Return Bond primarily invests in bonds and other fixed or floating-rate income instruments, while allowing a limited allocation to lower-rated or unrated securities considered below investment grade.

Eaton Vance Total Return Bond Fund has three-year annualized returns of 5.8%.Vishal Khanduja has been one of the fund managers of EIBAX since 2019.

American High-Income Municipal Bond invests in securities that are exempt from regular federal income tax and may subject investors to alternative minimum tax.

American High-Income Municipal Bond has three-year annualized returns of 5.1%. AMHIX has an expense ratio of 0.68%.

To view the Zacks Rank and the past performance of all municipal bond funds, investors can click here to see the complete list of municipal bond funds.

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