Buying Muni Fund Before Dividend Date?

[MercyMe]

I know that I shouldn't buy a bond fund a week before its dividend date. But what if it is a muni bond fund? In this case, I'd just be paying state taxes on the dividend, right?

 

[MercyMe]

Hey audreyh1 - where did your reply go?

 

[audreyh1]

Bond funds are kind of like interest bearing accounts where dividends are paid out regularly and you get paid dividends proportionally to your time in the fund. So I don’t worry about the timing on buying relative to dividend distribution dates.

Annual cap gains distributions are another matter. But for bond funds those are infrequent and quite small generally occurring during periods when interest rates have been dropping.