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Pros And Cons Of A Tax-Free Income Fund

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A Tax-Free income fund is a fund that has dividends that aren't taxed. Another name for this fund is municipal bond. The risk in these funds are usually pretty low as well as their reward. As stated before this fund does pay dividends but does not have to pay taxes on those dividends. Most of these funds come as municipal bond which are issued in most states. A pro would be that these funds are no taxed upon. A con is that their rate of return is really low. I personally would not invest in this type of fund.

A Sector fund is a fund that in specific types of businesses. The risk/reward of these funds vary and according to the state of the economy. Whether or not these mutual funds have dividends depending on which sector you invest in. Since

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