Tax boon for clients: Funds that sidestep AMT
March 29, 2017 3:35 PM
With taxes top of mind in the spring, now’s a natural time to consider the best-performing AMT-free muni bond funds. The larger universe of muni funds generates income that, while exempt from federal income taxes, can still add to a client’s federal AMT calculation. These funds sidestep that, which can be a big consideration for HNW and UHNW clients.
However, for that additional benefit, the funds typically generate lower yields, says Morningstar analyst Ken Oshodi. AMT-free funds underperformed the larger muni category over the past year, Oshodi notes, although they slightly outperformed over the longer-term, especially 10 years.
Scroll through to see the 20 best performing AMT-free touted funds over the past five years. All data from Morningstar.
However, for that additional benefit, the funds typically generate lower yields, says Morningstar analyst Ken Oshodi. AMT-free funds underperformed the larger muni category over the past year, Oshodi notes, although they slightly outperformed over the longer-term, especially 10 years.
Scroll through to see the 20 best performing AMT-free touted funds over the past five years. All data from Morningstar.
20. BMO Intermediate Tax-Free Y (MITFX)
1-Yr. Return: 0.10%
5-Yr. Return: 2.72%
Expense Ratio: 0.55%
Ttal Assets (millions): $1,588
5-Yr. Return: 2.72%
Expense Ratio: 0.55%
Ttal Assets (millions): $1,588
19. JHancock Tax-Free Bond A (TAMBX)
1-Yr. Return: -0.12%
5-Yr. Return: 2.79%
Expense Ratio: 0.81%
Total Assets (millions): $566
5-Yr. Return: 2.79%
Expense Ratio: 0.81%
Total Assets (millions): $566
18. Elfun Tax-Exempt Income (ELFTX)
1-Yr. Return: 0.44%
5-Yr. Return: 2.93%
Expense Ratio: 0.20%
Total Assets (millions): $1,486
5-Yr. Return: 2.93%
Expense Ratio: 0.20%
Total Assets (millions): $1,486
17. JPMorgan Tax Free Bond A (PMBAX)
1-Yr. Return: -0.03%
5-Yr. Return: 2.99%
Expense Ratio: 0.67%
Total Assets (millions): $325
5-Yr. Return: 2.99%
Expense Ratio: 0.67%
Total Assets (millions): $325
16. First Investors Tax Exempt Opps A (EIITX)
1-Yr. Return: -0.02%
5-Yr. Return: 3%
Expense Ratio: 1%
Total Assets (millions): $280
5-Yr. Return: 3%
Expense Ratio: 1%
Total Assets (millions): $280
15. Franklin Federal Tax-Free Income A (FKTIX)
1-Yr. Return: 0.56%
5-Yr. Return: 3.21%
Expense Ratio: 0.61%
Total Assets (millions): $12,479
5-Yr. Return: 3.21%
Expense Ratio: 0.61%
Total Assets (millions): $12,479
14. Northern Tax-Exempt (NOTEX)
1-Yr. Return: 0.20%
5-Yr. Return: 3.25%
Expense Ratio: 0.45%
Total Assets (millions): $1,081
5-Yr. Return: 3.25%
Expense Ratio: 0.45%
Total Assets (millions): $1,081
13. Dreyfus AMT-Free Municipal Bond Z (DRMBX)
1-Yr. Return: -0.17%
5-Yr. Return: 3.26%
Expense Ratio: 0.49%
Total Assets (millions): $984
5-Yr. Return: 3.26%
Expense Ratio: 0.49%
Total Assets (millions): $984
12. American Funds Tax-Exempt Bond A (AFTEX)
1-Yr. Return: 0.28%
5-Yr. Return: 3.32%
Expense Ratio: 0.54%
Total Assets (millions): $13,408
5-Yr. Return: 3.32%
Expense Ratio: 0.54%
Total Assets (millions): $13,408
11. Columbia Tax-Exempt A (COLTX)
1-Yr. Return: 0.18%
5-Yr. Return: 3.38%
Expense Ratio: 0.76%
Total Assets (millions): $3,832
5-Yr. Return: 3.38%
Expense Ratio: 0.76%
Total Assets (millions): $3,832
10. Delaware Tax-Free USA A (DMTFX)
1-Yr. Return: 0.30%
5-Yr. Return: 3.42%
Expense Ratio: 0.81%
Total Assets (millions): $501
5-Yr. Return: 3.42%
Expense Ratio: 0.81%
Total Assets (millions): $501
9. Fidelity Tax-Free Bond (FTABX)
1-Yr. Return: 0.10%
5-Yr. Return: 3.51%
Expense Ratio: 0.25%
Total Assets (millions): $3,153
5-Yr. Return: 3.51%
Expense Ratio: 0.25%
Total Assets (millions): $3,153
8. MainStay Tax-Free Bond B (MKTBX)
1-Yr. Return: 0.11%
5-Yr. Return: 3.56%
Expense Ratio: 1.04%
Total Assets (millions): $2,452
5-Yr. Return: 3.56%
Expense Ratio: 1.04%
Total Assets (millions): $2,452
7. Lord Abbett AMT Free Municipal Bond I (LMCIX)
1-Yr. Return: 0.61%
5-Yr. Return: 3.58%
Expense Ratio: 0.40%
Total Assets (millions): $203
5-Yr. Return: 3.58%
Expense Ratio: 0.40%
Total Assets (millions): $203
6. USAA Tax Exempt Long-Term (USTEX)
1-Yr. Return: 0.64%
5-Yr. Return: 3.64%
Expense Ratio: 0.51%
Total Assets (millions): $2,352
5-Yr. Return: 3.64%
Expense Ratio: 0.51%
Total Assets (millions): $2,352
5. Vanguard Long-Term Tax-Exempt (VWLTX)
1-Yr. Return: 0.46%
5-Yr. Return: 3.66%
Expense Ratio: 0.19%
Total Assets (millions): $9,959
5-Yr. Return: 3.66%
Expense Ratio: 0.19%
Total Assets (millions): $9,959
4. Lord Abbett Natl Tax-Free Income A (LANSX)
1-Yr. Return: 0.37%
5-Yr. Return: 3.85%
Expense Ratio: 0.74%
Total Assets (millions): $1,958
5-Yr. Return: 3.85%
Expense Ratio: 0.74%
Total Assets (millions): $1,958
3. Eaton Vance AMT-Free Municipal Income I (EVMBX)
1-Yr. Return: 0.65%
5-Yr. Return: 3.89%
Expense Ratio: 0.56%
Total Assets (millions): $346
5-Yr. Return: 3.89%
Expense Ratio: 0.56%
Total Assets (millions): $346
2. Vanguard High-Yield Tax-Exempt (VWAHX)
1-Yr. Return: 0.96%
5-Yr. Return: 4.01%
Expense Ratio: 0.19%
Total Assets (millions): $10,686
5-Yr. Return: 4.01%
Expense Ratio: 0.19%
Total Assets (millions): $10,686
1. Pioneer AMT-Free Municipal A (PBMFX)
1-Yr. Return: -0.08%
5-Yr. Return: 4.26%
Expense Ratio: 0.81%
Total Assets (millions): $1,237
5-Yr. Return: 4.26%
Expense Ratio: 0.81%
Total Assets (millions): $1,237
