Blackrock National Municipal Bond (MANLX)

I've reluctantly taken on a number of home improvement projects over the years. I grew up with a dad who could do just about anything and make it look professional. We even built a house in southern Colorado that turned out beautifully. It hasn't come easy for me, though. I think my mind is a sharper tool than my hands, but it has been fun to try. One thing I've learned is how helpful it is to have the right tool. There are times when I went from completely helpless to moderately skilled just by having the right tool.

Investments are like tools in that some are very good for one situation and not so good for another situation. Blackrock National Municipal Bond fund can be very powerful for someone looking for a non-state-based municipal fund.

Municipal bond funds can be based out of your state, which saves you on both your federal and state taxes. In some cases, though, it is better to simply buy a stronger municipal bond fund and pay the state tax. For example, in New Mexico, there are not a lot of NM Municipal bond funds. It is better for me to pay the NM tax on the national fund rather than use a New Mexico fund.

The Blackrock fund is in the top 1% of all national municipal bond funds over the last 15 years. It outperforms its benchmark in almost every period over that 15 year period. They don't take on a lot of extra credit risk, so it isn't as simple as chasing higher yield. They've really done a stellar job in providing returns on municipal bonds. MANLX also has a balanced exposure to short-term, medium-term, and long-term issues.

Municipal bonds make a lot of sense for people who pay at the 22% tax bracket or more. Bonds have risk, too. When interest rates rise, bonds can lose money.