What is a Nuveen municipal bond fund?


Quick Answer

A Nuveen municipal bond fund offers investors the opportunity to invest in a municipal bond portfolio, states Nuveen Investments. Funding from municipal bonds is used for government expenses or for special governmental projects.

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Full Answer

Investors may choose a Nuveen municipal bond to obtain returns long-term while maintaining the original investment, reports Nuveen Investments. Municipal bonds are debt notes issued by the federal government, states or local governments in order to raise funds. Investors may purchase shares in funds created by Nuveen Investments with these municipal bonds. These funds may offer distinct tax benefits such as interest free of federal or state taxes. High tax bracket investors may particularly benefit from funds that are free of federal taxes.

These funds may help investors achieve a diverse portfolio, states Nuveen Investments. Federal municipal and 15 different state funds are available for investors.

Investors should be aware of the potential risks of municipal bonds such as market interest rate changes, says Nuveen. Changing interest rates and credit changes may impact the market value of municipal bonds. Capital gains are still subject to capital gains taxes even if these investments are exempt from other taxes. The Alternative Minimum Tax, state and local taxes may also apply.

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