Tax Exempt Funds ?

[hadavi]

What do you all think about Tax-Exempt Funds right now? I have alot of money in Vanguard's Limited Term and Intermediate Term admiral mutual funds.

I noticed that they have moved up more than I expected the last several months and I wanted to get a feel for the general feelings on Muni. Bonds in the near future.

[caninelover]

Others are probably more expert than me, but I think short term munis should be fine (as long as they are checked out, which Vanguard does).

Personally I am leery of anything beyond short term right now in bonds as interest rates are bound to rise eventually. However it does depend a bit on how you're using the fund too...if its a long term holding and you're dollar cost averaging into it, than I wouldn't worry.

As I said, I am not the world's foremost expert so I'd be interested in hearing from others.

[walkinwood]

Take your tax rate into consideration and see if you get a better return on tax-exempt or taxable funds. Take your asset allocation into account to determine your fund duration.

[freebird5825]

I'm keeping my VG TE muni bond stakes right where they are at.

As a side note, the emergence of the BAB bonds (not TE) has created a lot of activity in the muni bond arena.
IRS Issues Guidance on New Build America Bonds
I have not seen any good articles about the effect of the issuance of the new BAB bonds on the traditional TE muni bonds.
I checked with VG to see if BABs would be acquired in any of their TE bond funds, and the answer was a definite NO.